Reasons for Increase in Price of Bitcoin, According to eToro

The broker believes that the price of the cryptocurrency could reach USD 13,000. What no one knows yet is how long the upward trend could last.

In recent days, the market of Bitcoin (BTC) and cryptocurrencies, in general, has achieved significant growth. According to a report from brokerage firm eToro, four reasons would explain this behavior and its possible next level.

As the first element, the firm highlighted the growth in the trading volumes that there has been on exchanges in recent weeks. Javier Molina, Spokesperson for eToro in Spain, considers that transactions above USD 100,000 have increased, which seems to indicate greater participation of corporate investors.

The spokesperson stressed that this is important since a part of those players are either institutions or professionals, which means greater adoption and consistency in the process. According to eToro, BTC has exhibited a 53% return until now in 2020, while Ether (ETH) has shown a 146% advance.

The second factor to consider would be the increase in trading volumes in the Bitcoin derivatives markets, according to the platform Skew. There, open interest in BTC would be attracting more attention among investors in markets such as Bakkt, close to the New York Stock Exchange or the Chicago Mercantile Exchange (CME).

The third aspect that would be starting the engines of the cryptocurrency market is that of decentralized finance (DeFi). In recent months, the implementation of new protocols such as yield farming has been attracting the attention of new participants. In recent weeks, Compound and MakerDAO have been pushing DeFi beyond USD 3 billion worth of locked value.

The fourth reason would be stablecoins. For eToro, their use is no longer awakening only FinTech companies seeking new solutions, but also classic players like VISA or PayPal. Corporations would be evaluating these types of alternatives more closely to bring them to their payment systems.

Bitcoin’s Rise and Fall in 2020

One point that eToro highlighted about the behavior of the cryptocurrency market is that, if the upward trend continues, the price of Bitcoin could range from USD 12,000 to USD 13,000. Molina believes that investors want to know how long the latest upward trend could last.

Even though he does not offer a specific answer, the eToro spokesperson believes that, as long as the USD 10,000 support in Bitcoin is not lost, the market could continue to rise. The price of Bitcoin reached USD 11,000 for the first time in 2019. Bitcoin achieved it more than two months after the halving.

Until now this year, the price of the first cryptocurrency has shown strong changes in its price. March 12th passed into history as “Black Thursday” in the cryptocurrency ecosystem. That day, BTC lost more than 40% of its price to be worth less than USD 4,700 per unit.

Currently, the market is growing with Bitcoin up by 19.7% in the last seven days and Ether growing 31.6% in the same period. Other projects with significant increases in the last week are XRP (22.6%), Bitcoin Cash (26.9%), Cardano (18%), Bitcoin SV (20.8%), and Litecoin (27.9%).

At the time of writing this article, the price of Bitcoin moved around USD 11,101, while that of Ethereum’s native cryptocurrency was around USD 336, according to data from CoinMarketCap.

By Alexander Salazar