Cryptocurrency News

Bitcoin stabilizes as additional whale purchases reassure investors

Square, MicroStrategy announced an increase in the share of digital coins in their investment portfolios.

Bitcoin has stabilized after a sharp sell-off in the past few days, as additional purchases from MicroStrategy and Square have helped allay fears of investors who have begun to close long positions in the notoriously highly volatile cryptocurrency.

“I’ll instead predict that 2021 is a year where institutions position themselves in Bitcoin and crypto. Overly, this will help drive awareness and adoption, a net positive for the crypto ecosystem” says Bohdan Prylepa CTO of Prof-it Blockchain Ltd and COO in Bitcoin Ultimatum

BTC rose 7% on Wednesday, failed to gain a foothold above 51,000 and by the evening was trading at about $ 49,150 per coin. Prices fell about 13% on Tuesday, the worst daily drop in a year.

Jack Dorsey’s payment system Square bought $ 170 million worth of bitcoins, increasing the share of the cryptocurrency flagship in the portfolio to about 5% of the company’s cash and equivalents. MicroStrategy said it paid an average of $ 52,765 for nearly 20,000 tokens last week following a $ 1.05 billion convertible bond issue.

Coinbase, the largest digital asset exchange in the United States, said BTC was impacted by a shutdown in the Federal Reserve’s interbank payments system in the afternoon.

General investor sentiment also improved thanks to comments from Fed Chairman Jerome Powell, who made it clear that the central bank is far from scaling back its stimulus policy. Cryptocurrencies have been supported by a flow of monetary and fiscal stimulus to combat the effects of the pandemic.

The rebound was helped by the simultaneous recovery in stocks as the Fed chairman reassured the market of the central bank’s commitment to ultra-accommodative monetary policy,” said Joel Kruger, cryptocurrency strategist at LMAX Digital.

The cryptocurrency rally is at the center of one of the hottest discussions in the financial markets. Crypto enthusiasts are seeing long-term investors, not just speculators, in an emerging asset class. Skeptics fear bitcoin is a bubble that will inevitably burst. Both sides seem to agree that the famous ultra-high volatility of the world’s largest digital asset is likely to continue for the foreseeable future.

Around the world, regulators are closely monitoring the dynamics of cryptocurrency prices in 2021. The Bank of Portugal on Wednesday echoed previous recommendations to consumers regarding virtual assets like bitcoin. Earlier there was a warning from the Swedish financial regulator. US Treasury Secretary Janet Yellen called bitcoin on the eve “an extremely ineffective way of conducting transactions.”

Nonetheless, cryptocurrencies continue to receive support from financial heavyweights. Katie Wood, head of Ark Investment, said in an interview with Bloomberg on Tuesday that she is “very positive about Bitcoin, very excited to see a healthy correction now.”

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