+ 3.09
+ 0.93%
+ 2.24
+ 0.65%
+ 3.19
+ 0.76%
+ 1.39
+ 0.81%

Bitcoin Recovers Above $51,000 Fueled By Square $170M Purchase, Cathie Wood Backing

February 24, 2021 1:24 am
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Bitcoin Recovers Above $51,000 Fueled By Square $170M Purchase, Cathie Wood Backing

Bitcoin price (CRYPTO: BTC) traded past the psychologically important $50,000 mark at press time after having risen as high as $51,194.78 in the preceding 24-hour period.

What Happened: The apex cryptocurrency traded 1.9% higher at $50,106.42 at press time, boosted by Square Inc’s (NYSE:SQ) $170 million purchase of 3,318 BTC.

When combined with a $50 million previous BTC purchase, it represents five percent of Square’s total cash, cash equivalents, and marketable securities as of Dec. 31, 2020. 

See also: How to Buy Bitcoin (BTC)

“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 said in a statement on Tuesday.

Bitcoin also found a supporter in Ark Investment Management LLC CEO Cathie Wood who told Bloomberg, “We’re very positive on Bitcoin.”

On the recent dip in the value, she said, “Very happy to see a healthy correction here, No market is straight up.” 

“We see so many use cases of Bitcoin, But yeah probably the most important use case is an insurance policy around the world against [the] confiscation of wealth,” said Woods pointing to inflation and outright seizure of assets.

Why It Matters: Wood also dubbed a dip in Tesla Inc (NASDAQ:TSLA) as healthy on the same day. Ark purchased 240,458 shares of the automaker for its ETFs taking advantage of the rout.

BTC fell below the $50,000 mark on Tuesday after Tesla CEO Elon Musk said the cryptocurrency and Ethereum (CRYPTO: ETH) valuations “seem high.” 

Wedbush analyst Daniel Ives said Tesla’s shares are now tied to BTC since the company purchased $1.5 billion worth of the cryptocurrency in February. 

The analyst said there is a “lingering worry” that the BTC sideshow could overshadow the overall EV growth story playing out for the automaker this year and beyond.

Meanwhile, Square’s fourth-quarter revenue jumped 141% on a year over year basis to $3.16 billion falling short of an estimated $3.22 billion.

The company said more than 3 million users purchased or sold Bitcoin through its Cash App last year. The Cash App generated nearly $1.76 billion in BTC revenue and $41 million in gross profit.

Price Action: Square shares fell nearly 5.7% in the after-hours trading to $242.05 on Tuesday after closing the regular-session 4.33% lower at $256.59.

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