- After starting off the week with a sudden crash that saw it record its sharpest-ever gross drop in a few hours, Bitcoin has regained the $50,000 level.
- This comes on the back of Square Inc. tripling down on its Bitcoin stash, NYAG and Tether settling their legal battle and high activity of whales on Coinbase.
Bitcoin started off this week with a flash crash that sent shockwaves across the market. The top cryptocurrency had recorded a new all-time high at $58,419 on February 21 and looked set to hit the $60,000 mark for the first time. It then crashed following record inflows into exchanges, losing 21% in hours. However, Bitcoin has recovered and reclaimed $50,000.
Bitcoin dipped just below $46,000 yesterday for the first time since February 11. As CNF reported, BTC whales were behind the dip, with a sizeable number disposing of their BTC holdings. On-chain analytics firm Santiment revealed that BTC whales with at least 1,000 BTC had dropped by 1.9%. Additionally, BTC inflow into exchanges had spiked eleven-fold. The selling pressure weighed on the flagship cryptocurrency, and it inevitably dipped.
In the past 24 hours, Bitcoin has traded sideways, recording its lowest price at $45,731. However, the cryptocurrency has regained the critical $50,000 level once again. At press time, the crypto was trading at $50,295.
Square Inc. buys more BTC
The sudden dip had led to speculation that institutions were, at last, getting into the profit-taking mode. These investors, which include some of the largest Wall Street firms, have been key players in the BTC rise. With hundreds of millions of dollars coming into the market, demand has been extremely high, boosting the price.
Square Inc., the payments processor led by Bitcoin bull Jack Dorsey, proved that institutions are still all in with its latest BTC purchase. The company revealed that it had taken advantage of the slight price dip to build upon an earlier purchase.
In a press release, the company stated, “Square also announced today that it has purchased approximately 3,318 bitcoins at an aggregate purchase price of $170 million. 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.”
The NYSE-listed firm further reiterated its belief that cryptocurrencies are much more than just speculative assets. “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,” the company added.
Square first bought Bitcoin in October last year when the price was around $10,500. At the time, Square invested $50 million in the cryptocurrency, purchasing about 38,250 BTC. This investment has blown up by over 500% since then.
Bitcoin’s price could also have reacted positively to the news that Tether and Bitfinex had settled with New York regulators. The two firms’ parent company iFinex has been in a legal battle with the state Attorney General for close to two years. As CNF reported, iFinex had settled with the AG, agreeing to pay $18.5 million in fines.
Finally, Ki Young Ju, CEO of CryptoQuant, has also pointed to a significant trend reversal in the recently much-watched “Coinbase premium.” The value is considered an indicator of the strength of institutional interest, as Coinbase Pro is the preferred platform for large investors. When the value is positive, it indicates a high level of institutional interest. The price premium turned to a high of +486 USD after the dip to $48,000 from its lowest ever measured value. Thus, whales seem to have taken advantage of the dip.