The entire crypto space has largely been in the red zone for the past couple of days, with Bitcoin recording a whooping $10,000 drop in a day.
Despite the current crypto bloodbath, Square has purchased an additional $170 million worth of Bitcoin to its BTC portfolio. Amounting to 3,318 bitcoins, each BTC was purchased at $51,235. The payment platform made this announcement on Tuesday, also disclosing that it has plans to harness the current dip to expand its current BTC position.
Square’s recent Bitcoin purchase, alongside its previous holdings, brings its total purchase to about 5% of its entire cash reserve. Bitcoin, at the time of Square’s announcement, was trading at about $48,000.
Bitcoin at Par With Square
Square, in a recent press release, disclosed that the “King Crypto” was in alignment with its vision. Hence, the need to expand its Bitcoin holding, therefore improving its Bitcoin position. According to Square, Bitcoin currently stands as a major tool for economic and financial inclusion and empowerment. Also, providing everyone, irrespective of social or financial status, with the opportunity to secure their financial future. Furthermore, these objectives resonate deeply with the mobile-based payment processing platform.
“Buying the Dip,” so to say, is Square’s way of showing its unwavering support and also its commitment to the “King Crypto.”
Institutional Interest in BTC on the Rise
As Simon Yu, CEO of StormX, pointed out in a tweet, Bitcoin “can’t be bearish when institutions keep buying in bulk.”
Can't be bearish when insitutions keep buying in bulk. https://t.co/QQ58UXrVHI
— Simon Yu (@SimonYuSEA) February 24, 2021
This couldn’t have been said better. 2020, saw an unexpected rise in institutional interest in Bitcoin. Starting with Micheal Saylor’s MicroStrategy and its initial iconic $250 million Bitcoin purchase. Interestingly, MicroStrategy is the first-ever Nasdaq-listed company to invest in Bitcoin. Square, in October 2020, also purchased about $50 million worth of Bitcoin. At that time, the purchase was approximately 1% of its total cash reserve.
Recently, Tesla spent $1.5 billion on Bitcoin. This purchase alone is estimated to be about 8% of Tesla’s reserve. Interestingly, the purchase has been touted as being behind the Bitcoin price rally to over $58,000. The CEO of Tesla, Elon Musk, also recently tweeted that Bitcoin price appeared ” high.”
That said, BTC & ETH do seem high lol
— Elon Musk (@elonmusk) February 20, 2021
Current Price Drop Linked To Massive Whales Withdrawals
Bitcoin, on Monday, February 22, 2021, dropped by $10,000, i.e., from $58,000 to $48,000. This currently stands as the biggest drop ever in Bitcoin’s history.
According to Glassnode, several whales offloaded huge amounts of bitcoins this year.
“Whales,” simply put, are Bitcoin addresses holding between 1,000 BTC and 10,000 BTC. “Humpback whales,” on the other hand, are BTC addresses with over 10,000 BTC.
Moreover, the current BTC price drop this week has been linked to a number of whale movements.
However, trading platform CrossTower points out that there’s no reason to panic. Also, adding that current institutional purchases are sure to keep Bitcoin above $50,000.
At the time of writing, Bitcoin was trading at $50,573.23, with a market cap of $942,542,515,813 and a 24-hour trading volume of $106,518,232,215.
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