MicroStrategy buys 205 bitcoin for $10 million

The world’s largest publicly-traded business intelligence company now owns close to 91,064 bitcoin as of March 5, acquired at an aggregate purchase price of about $2.196 billion and an average purchase price of around $24,119 per bitcoin. (bit.ly/38avqNW)

Bitcoin was trading at $47,663 on Friday, down 18.3% from a record high of $58,354.14 hit on Feb. 21.

MicroStrategy spent last year steadily amassing more bitcoin after making its first investment in August as the cryptocurrency soared in value. It has since made multiple purchases of the digital currency.

The company bought 328 bitcoin for about $15 million in cash on March 1. (reut.rs/3sRe2Wv)

MicroStrategy’s shares fell 1% in pre-market trading.

Bitcoin rises 5% to $50,942.58

Bitcoin rose 5% to $50,942.58 on Wednesday, adding $2,426.23 to its previous close.

Bitcoin, the world’s biggest and best-known cryptocurrency, has risen 83.7% from the year’s low of $27,734 on Jan. 4.

Bitcoin has fallen 12.7% from the year’s high of $58,354.14 on Feb. 21.

Bitcoin’s price soared this year as major firms, such as BNY Mellon, asset manager BlackRock Inc, credit card giant Mastercard Inc, backed cryptocurrencies, while those such as Tesla Inc Square Inc and MicroStrategy Inc invested in bitcoin.

Ether, the coin linked to the ethereum blockchain network, rose 7.18 % to $1,595.64 on Wednesday, adding $106.84 to its previous close.

Bitcoin is at a ‘tipping point” – Citi Analysts

Bitcoin is at a “tipping point” and could in the future become the preferred currency for international trade or face a “speculative implosion,” Citi analysts said.

With the recent embrace by the likes of Tesla Inc and Mastercard Inc, bitcoin could be at the start of a “massive transformation” into the mainstream, Citi said in a report.

The growing involvement from institutional investors in recent years contrasts with heavy retail-focus for most of the past decade, it added.

If businesses and individuals gain access via digital wallets to planned central bank digital cash and so-called stablecoins, bitcoin’s global reach, traceability and potential for quick payments would see it “optimally positioned” to become the preferred currency for international trade, Citi said.

Bitcoin, designed as a payment tool, is little used for commerce in major economies, hampered by high volatility and relatively costly transactions. Still, it has over the past year gained traction in some emerging markets such as Nigeria.

Such a dramatic transformation for bitcoin to the de facto currency of world trade – a status currently held by the dollar – would depend on changes to its market to allow wider institutional participation and closer oversight by financial regulators, Citi said.

Still, shifts in the macro-economic environment may also make the demand for bitcoin less pressing, it added.

The recent surge in interest in bitcoin, sparked by a narrative that it can act as a hedge against inflation, has driven the cryptocurrency to a record high of $58,354 and a $1 trillion market capitalisation.

But it has pulled back more than $11,000 from those levels in the last week on questions over the sustainability of such high prices.

“There are a host of risks and obstacles that stand in the way of Bitcoin progress,” Citi’s analysts wrote. “But weighing these potential hurdles against the opportunities leads to the conclusion that Bitcoin is at a tipping point.”

Bitcoin was trading 4.5% higher at $47,284 on Monday, up over 60% so far this year.

(Graphic: Bitcoin’s surge from March lows: )

Reuters Graphic

Bitcoin extends retreat from record high to hit lowest in 20 days

Bitcoin fell to its lowest since Feb. 8 in thin on Sunday, down 3.7% from Friday’s close as the pullback from a record high near $60,000 continued.

The world’s biggest and best-known cryptocurrency has risen as much as 70% since the start of the year, hitting a record high of $58,354.14 one week ago amid increasing confidence that it will become a mainstream investment and payments vehicle.

Bitcoin falls over 6% to lowest in two weeks

Bitcoin fell as much as 6% on Friday to its lowest in two weeks, as a rout in global bond markets sent yields flying and sparked a sell-off in riskier assets.

The world’s biggest cryptocurrency slumped as low as $44,451 before recovering some of its losses. It was last trading down 1.3% at $46,588.

The sell-off echoed that in equity markets, where European stocks tumbled as much as 1.5%, with concerns over lofty valuations also hammering demand. Asian stocks fell by the most in nine months.

Bitcoin has risen about 60% from the start of the year, hitting an all-time high of $58,354 this month as mainstream companies such as Tesla Inc and Mastercard Inc embraced cryptocurrencies.

Payments firm Square buys $170 million worth of bitcoins

(Reuters) – Jack Dorsey’s Square Inc has bought around 3,318 bitcoins for $170 million, the payments firm said, raising the bets on the world’s biggest cryptocurrency that is gaining mainstream acceptance with support from big investors.

Dorsey, who is also the chief executive of social media firm Twitter Inc, is a bitcoin enthusiast and has said he believes the internet will have its own native currency.

Square had in October said it purchased about 4,709 bitcoins at an aggregate price of $50 million.

The coin’s price has since then scaled record highs, with Tesla Inc investing $1.5 billion and Bank of NY Mellon Corp saying it will set up a unit to help its clients buy bitcoins.

In its fourth-quarter purchase, Square seems to have paid more than $51,000 per bitcoin. The spot price of the currency on Tuesday crashed more than 13% to below $47,000 amid a broader market downturn.

Shares of the company, which allows buying and selling of bitcoin on its Cash App, fell 6% to $41.44 after the bell on Tuesday.

Square’s revenue in the quarter more than doubled to $3.16 billion, which the company said was helped by bitcoin purchases on Cash App.

It posted adjusted earnings of 32 cents per share, beating market expectation of 24 cents, according to Refinitiv IBES, boosted by higher online payments due to the pandemic.

Bitcoin: Elon Musk loses world’s richest title as Tesla falters

Tesla boss Elon Musk has lost his title as the world’s richest person after a recent slide in the electric carmaker’s shares, the main driver of his wealth.

Tesla shares have tumbled more than 20% since hitting a high of more than $880 in early January.

The fall comes as the firm has been hit with criticism from Chinese regulators and revealed a risky $1.5bn (£1bn) investment in Bitcoin.

The value of the cryptocurrency jumped nearly 50% after the disclosure.

But since rising above $57,000 on Sunday, Bitcoin has dropped nearly 20%. It was trading at less than $48,000 on Tuesday.

While that might not have hurt Tesla – Bitcoin is still worth more than it was when the firm disclosed its bet – the risks associated with the volatile cryptocurrency could have prompted some investors to sell, Wedbush Securities analyst Dan Ives said.

Tesla charging points at a Shanghai mall

“By Musk and Tesla aggressively embracing Bitcoin… investors are starting to tie Bitcoin and Tesla at the hip,” he said.

“The recent 48-hour sell-off in Bitcoin and added volatility has driven some investors to the exits on this name in the near-term.”

What is causing the Bitcoin sell-off?

Mr Musk was credited with helping to fuel Bitcoin’s rise, when Tesla revealed it had purchased $1.5bn of the currency and planned to accept it as payment. Now he may have himself to blame for some of the recent Bitcoin declines. 

In an exchange on Twitter over the weekend Mr Musk wrote that the price of Bitcoin did “seem high lol”.

Also driving Bitcoin lower were comments from US Treasury Secretary Janet Yellen, who sounded a warning on Bitcoin on Monday. She called it an “extremely inefficient way of conducting transactions”.

The comments follow a recent surge of interest in Bitcoin, after major US firms such as Mastercard and Bank of NY Mellon followed Tesla’s lead in announcing plans to incorporate the digital currency into their operations.

What else is affecting Tesla?

Mr Musk’s attention to Bitcoin comes as Tesla faces other challenges. 

The firm recently halted most sales of the lowest-priced version of its Model Y SUV, with Mr Musk citing a desire to improve the car’s range.

Earlier this month, Chinese regulators summoned the firm over safety and quality issues, stemming from reports of battery fires and abnormal acceleration.

Five Chinese regulators have recently summoned Tesla over quality and safety issues.
image captionChina is Tesla’s biggest source of sales after the United States

Rival carmakers such as General Motors and Volkswagen have also stepped up their focus on electric vehicles in recent months.

Shares in the electric carmaker Tesla are currently the biggest source of Mr Musk’s wealth. Their rapid rise first propelled him past Amazon boss Jeff Bezos in the world’s richest ranking in January, with the two billionaires vying for the top spot in the weeks since. 

Monday’s decline in share price was the biggest fall seen since September and wiped more than $15bn off Mr Musk’s net worth, according to Bloomberg.

Mr Musk’s tweets have also famously triggered sharp moves in Tesla shares, including last summer when the firm lost $14bn in market value after he wrote that its share price was too high.

Bitcoin hits fresh high

(Reuters) – Bitcoin continued gaining on Sunday, rising to a fresh high and extending a two-month rally that took its market capitalization above $1 trillion on Friday.

The world’s most popular cryptocurrency rose to a record $58,354, taking its weekly gain to around 20%. It has surged around 100% this year.

Bitcoin’s gains have been fueled by evidence it is gaining acceptance among mainstream investors and companies, such as Tesla Inc, Mastercard Inc and BNY Mellon.

Bitcoin is ‘economic side show’ and poor hedge against stocks: JP Morgan

TOKYO (Reuters) – Bitcoin is an “economic side show” and a poor hedge against a decline in equity prices, analysts at JP Morgan said in a sobering assessment that could undercut the cryptocurrency’s rise to record highs.

Current prices are well above JP Morgan’s estimates of fair value and the mainstream adoption of bitcoin increases its correlation with cyclical assets, which reduces the benefits of diversifying into bitcoin, the investment bank said in a memo.

Bitcoin, the most popular cryptocurrency, last traded at $51,116 on Friday, down from a record high of $52,640 reached on Wednesday. Rival cryptocurrency ether traded near a record of $1,951 reached earlier on Friday.

Bitcoin has surged by 45% so far this month, fuelled by signs it is winning acceptance among mainstream investors and companies, such as Tesla, Mastercard and BNY Mellon, but many observers remain sceptical of the unregulated and highly volatile digital asset.

“Crypto assets continue to rank as the poorest hedge for major drawdowns in equities, with questionable diversification benefits at prices so far above production costs, while correlations with cyclical assets are rising as crypto ownership is mainstreamed,” analysts at JP Morgan said.

Some of bitcoin’s supporters argue that the cryptocurrency is “digital” gold that can hedge against inflation and declines in the dollar.

Based on that logic, bitcoin would need to rise to $146,000 in the long-term for its market capitalisation to equal total private-sector investment in gold via exchange-traded funds or bars and coins, according to JP Morgan.

Tesla’s chief executive Elon Musk said on Thursday that owning bitcoin was only a little better than holding cash. He also defended Tesla’s recent purchase of $1.5 billion of bitcoin, which re-ignited mainstream interest in the digital currency.

Elon Musk says bitcoin is slightly better than holding cash

(Reuters) – Tesla Inc CEO Elon Musk on Thursday said that owning bitcoin was only a little better than holding conventional cash, but that the slight difference made it a better asset to hold.

“However, when fiat currency has negative real interest, only a fool wouldn’t look elsewhere,” Musk said in a tweet. “Bitcoin is almost as bs as fiat money. The key word is ‘almost’.”

He also defended Tesla’s action to invest in bitcoin, saying that the difference with cash made it “adventurous enough” for the S&P 500 company to hold the cryptocurrency.

Tesla’s $1.5 billion bitcoin purchase set the cryptocurrency soaring toward this week’s record peak above $50,000 while Musk’s recent promotion of dogecoin on Twitter also lifted the price of that cryptocurrency.

Bitcoin was steady just below a record peak of $51,284 on Friday.