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Financial services outfit Square just announced it has picked up more Bitcoin (BTC).
Square “has purchased approximately 3,318 bitcoin at an aggregate purchase price of $170 million,” the company said in a public statement on Tuesday, adding:
“Combined with Square’s previous purchase of $50 million in bitcoin, this represents approximately five percent of Square’s total cash, cash equivalents and marketable securities as of December 31, 2020.”
Bitcoin has fallen significantly this week so far, dropping below the $50,000 mark after tapping a record high past $58,000, based on TradingView.com data. Based on the $170 million sum Square swapped for about 3,318 BTC, the outfit looks to have paid an average of $51,235 per coin on its new investment.
“Aligned with the company’s purpose, Square believes that cryptocurrency is an instrument of economic empowerment, providing a way for individuals to participate in a global monetary system and secure their own financial future,” Square noted in the statement. “The investment is part of Square’s ongoing commitment to bitcoin, and the company plans to assess its aggregate investment in bitcoin relative to its other investments on an ongoing basis.”
Square bought $50 million worth of Bitcoin in 2020, which it announced last fall.
Square’s statement also included an unveiling of its 2020 financial documents. Twitter CEO Jack Dorsey also serves as CEO of Square. Dorsey recently donated 1 Bitcoin to a nonprofit aimed at Bitcoin technical progress.
In other trending Bitcoin News today:
3 Reasons BTC Price Is Quickly Recovering From Its ‘Severe’ 23% Correction
The price of Bitcoin (BTC) quickly recovered from around $44,800 to over $50,000 within merely 22 hours.
Behind the rapid recovery are three major factors, including low funding rates, Square’s $170 million Bitcoin purchase, and the spot market stabilizing.
Across major futures exchanges, including Binance, Bybit and Bitfinex, the funding rate of Bitcoin has dropped to 0.01%.
The Bitcoin futures funding rate was consistently above 0.1% throughout the entirety of the rally from the $40,000s to $58,000.
When the futures funding rate is high, it means the market is overcrowded with buyers and the rally likely overextended.
This creates a major risk of a long squeeze, which can cause the price of Bitcoin to drop quickly in a short period.
With the funding rate back to 0.01%, the risk of a long squeeze is significantly lower and if a new uptrend ensues, the rally could be more sustainable.
When the price of Bitcoin was correcting, the price of Bitcoin on spot exchanges, like Coinbase, was much lower than futures exchanges
On Feb. 23, for instance, Bitcoin was trading $600 lower on Coinbase at one point when the price was near $44,800.
When the price of Bitcoin initially recovered from $44,800 to $48,000, there were signs of a bearish retest.
John Cho, the director of global expansion at GroundX, said:
“We were expecting it, but didn’t think it’d come this soon or this fast. A solid bounce from here would be ideal; but some potential retracement support regions I’m watching. My bias is towards the 40-41k region as it would fulfill a 30% correction from ATH.”
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DISCLAIMER: This is NOT financial advice. The views and opinions expressed in this video are just opinions, nothing more. Trading is very risky, especially when trading with leverage. Seek financial advice from a professional and trade at your own risk because I am not responsible for any investment decisions that you choose to make.
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