Bitcoin Crosses Crucial $12K Mark Amidst Low Funding Rates

Bitcoin Crosses Crucial $12K Mark Amidst Low Funding Rates

Bitcoin (BTC) crossed the $12,000 threshold for the second time in two months, but crypto traders were not as bullish this time around as they were in mid-august, according to CoinDesk.

The open-source cryptocurrency attracted a lot of attention after its halving event in May 2020. Since then, rewards for mining blocks on the Bitcoin network has halved to 6.25 bitcoin per block.

What Happened: Fundings rates are one of the signals that determine the cryptocurrency's market outlook. The rates are positive for the bullish market and negative for bearish markets.

The funding rates in some of the cryptocurrency exchanges like Binance and Bitfinex remained negative or turned flat on Tuesday, according to CoinDesk.

CoinTelegraph reports that the average value per bitcoin transaction is on the rise, increasing six times to $151,000 per transaction, compared to $25,000 per transaction four months ago.

Why Does This Matter: Based on data from the CME Group Inc (NASDAQ: CME), CoinTelegraph claimed that institutional investors were long on Bitcoin contracts at a record high level. On the other hand, hedge funds are ensuring market liquidity for long-term investors by holding short positions on BTC contracts.

BTC price surge in the current week followed the International Monetary Fund’s virtual session on Monday discussing cross border payments and digital currencies.

The General Manager of Bank of International Settlements, Agustin Carstens, emphasized that Facebook Inc’s (NASDAQ: FB) digital currency - Libra, forced the central banks to pay heed to the digital assets space, according to Bloomberg. 

Price Action: BTC was trading 3.4% higher at 12,213 on last check, Wednesday.

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