The price of Bitcoin has been struggling to overcome the resistance at USD 12,000. Decentralized Finance (DeFi) has boosted Ether, which has managed to settle well above USD 400.
There have been external factors favorable to the performance of Bitcoin in the market, as well as health data from its network and accounting. This has allowed the cryptocurrency to perform appreciably since the end of July. However, the USD 12,000 mark has recently been elusive to Bitcoin’s attempts to exceed it.
Even so, there are several signs of increased confidence in the main cryptocurrency. On the side of individual users, there is evidence of growth in adoption, which reflects in record values for active addresses.
On the part of institutional investors, the growth in Bitcoin futures and options is remarkable, as well as that in investment funds that focus on the main cryptocurrency.
Institutional Confidence in Bitcoin
In recent days, the completion of a major business endorsement of Bitcoin took place. It is an institutional investment, but not through investment managers or futures exchanges. The business intelligence software company MicroStrategy announced the purchase of 21,454 BTC, which represented an increase of USD 250 million, including fees and other expenses.
In the face of the economic risks that the global health crisis and governments’ fiscal and monetary measures have created, Bitcoin had the attributes of a safe haven asset, according to the firm.
A day after the announcement, MicroStrategy’s stock rose by 14.6% and at the close of Nasdaq Stock Market last Friday, and the firm’s shares had appreciated by 18.7%. This represents an increase of USD 223 million in its market capitalization.
The stock market’s assessment of this strategy by MicroStrategy, which prefers to hoard Bitcoin rather than US dollars, was very positive for this company, but it is also positive for Bitcoin.
Ether Jumps over USD 400
The prices of both Ether and Bitcoin have shown several attempts to break their respective resistance levels in August. Ether has tried to break the USD 400 mark and Bitcoin the USD 12,000 mark.
In a specific way, Ether did it on August 2nd and 5th, hitting USD 404 both times. Bitcoin reached USD 12,008 on August 9th, although it lasted less than an hour above the elusive mark.
On August 13th, Ether surprisingly rebounded by 10% and exceeded USD 400 in a few hours. With a continued boom, it hit USD 444 on August 14th, before dipping and fluctuating around USD 420 on August 15th.
Many traders were confident that the top two cryptocurrencies by market capitalization coupled with their respective rises. However, Ether had an added boost from decentralized finance (DeFi).
The community around Curve Finance had been preparing to launch that platform’s governance token, Curve DAO. However, an enthusiastic developer went ahead and rolled out the respective contracts.
Curve Finance thoroughly reviewed the deployed contract and approved the spontaneous developer’s actions. This seems to be incontestable proof of what open source means.
By Alexander Salazar
