Bitcoin falls alongside stocks after tagging $58K.

The Bitcoin rally hit a speed bump last week, pushing prices down to $43K as the stock market dropped and US Treasury Secretary Janet Yellen claimed the leading cryptoasset is “extremely inefficient for transactions.”

Yet as the market moved lower, institutional investors kept buying. MicroStrategy and Square completed Bitcoin purchases of $1 billion and $170 million respectively, and Dubai’s IBC Group pledged 100,000 Bitcoin to support Miami’s blockchain strategy.

Although most altcoins were caught in the market downturn, Cardano bucked the bearish trend with double digit gains. The smart contract platform’s cryptoasset surged 16% last week as other major cryptos sustained losses.

This week’s highlights

• Cardano bucks the trend
• Bitcoin makes biggest daily drop ever

Cardano bucks the trend

Cardano’s stellar performance follows a stratospheric 2,000% surge over the last 12 months, which has seen it outstrip rivals like Binance Coin to become the third-largest cryptoasset as measured by market cap.

The blockchain’s developers announced last week that the “Mary” update will launch on March 1st. This will allow users to create their own tokens on the blockchain, potentially helping Cardano pull market share from other smart contract platforms to accommodate the growing DeFi ecosystem.

Meanwhile, Ethereum has suffered 20% losses over the past week amid rising dissatisfaction with high network fees.

Bitcoin makes biggest daily drop ever

Following record highs, Bitcoin has made a record-breaking pullback. The cryptoasset fell from a high of $58K to a low of $47.7K last Monday – the largest price drop ever in a single day.

Though Bitcoin has dropped by more than 20% on several occasions, this was the biggest single-day fall ever in dollar terms, with the coin losing $10K in value.

Nevertheless, the bounce was equally strong. The cryptoasset gained over 10% in 10 minutes as buyers stepped into the market with a vengeance.

The week ahead

Despite dipping almost 20% from the peak at $58K, Bitcoin is still firmly in bull market territory. During the 2017 bull market, retracements moved the price 30-40% lower before the trend resumed.

According to blockchain data sourced by Ki Young Ju, CEO of blockchain analytics firm CryptoQuant, dip buyers are already moving into the market. Transaction flows suggest institutions are continuing to accumulate Bitcoin at the discounted prices.

Nevertheless, experienced traders might be more cautious in the coming week. Historically, March has not been friendly to Bitcoin, with the cryptoasset falling six times during this month over the past seven years.

This post originally appeared on the eToro blog.

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Source: https://dailyhodl.com/2021/03/01/cardano-bucks-the-trend-as-crypto-market-pulls-back-etoro-crypto-roundup/

According to on-chain analytics provider, Glassnode, the late-February crypto market correction may have purged excessive leverage from the markets.

On March 1, Glassnode published a report analyzing the recent crypto crash — which was only the second significant crypto correction since the markets pushed into new record highs in late 2020.

Glassnodenoted the crash peaked with a 25% fall from the local top of $58,300 to $43,343. As such, the move was weaker than January’s dip which saw a roughly 30% retracement from $42,000 to less than $30,000.

The analytics provider suggested that these pullbacks are positive for the crypto markets overall, attributing the latest correction to liquidated leveraged positions held by risky speculators:

“Significant market corrections are positive events in that they flush out speculation, leverage, weak hands, and test holder conviction.”

The report added that several key market indicators were reset as BTC prices found fresh support, including futures open interest, futures funding rates, and the price premium for Grayscale’s investment products.

Futures open interest, which is the total number of outstanding contracts that have not been settled, dropped almost $4 billion or 22% from its peak of $18.4 billion. Glassnode also commented noted perpetual futures funding rates have also reset close to zero, which could indicate that traders are not willing to enter short positions, stating:

“Previous combinations of decreasing open interest and a reset of funding rates have indicated a flush in speculative trading has occurred.”

However, the report did note that open interest is still hovering roughly $2.5 billion above the previous peak of $3.9 billion on Feb. 21 — meaning there is still significant leverage within the market.

Glassnode also noted that shares in Grayscale’s Bitcoin Trust are trading at a discount compared to spot market prices for the first time ever, with investors paying a nearly 4% discount to access exposure to BTC through Grayscale’s trust.

It added that competing products such as Canada’s Purpose ETF could diminish Grayscale’s premium as more institutional products enter the market and close arbitrage opportunities.

At the time of writing, Bitcoin prices were up 5.3% over the past 24 hours, with BTC currently changing hands for $49,200.

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Source: https://cointelegraph.com/news/leverage-traders-flushed-out-by-late-february-crypto-crash-glassnode

The social media giant Twitter, on Mar 1, announced a $1.25 billion convertible bond offering. Anthony Pompliano now speculates Jack and his team may be preparing to allocate a portion of funds raised to Bitcoin, following MicroStrategy’s route.

Will Twitter Add Bitcoin to their Treasury?

In a tweet, a few hours after Twitter’s announcement, Anthony Pompliano said considering Jack Dorsey’s acknowledgment of BTC’s transformative capabilities; there is no dismissing the decision of Twitter channeling funds to the digital gold and holding BTC in their balance sheet.

MicroStrategy issued convertible notes, raising $1.05 billion before proceeding to purchase Bitcoin.

Convertible bond offerings are a cheaper way of raising funds for expansion, easier than conventional bond issuance.

Often, the route is by companies that are bullish on their future growth, but their credit ratings are less-than-stellar. Compared to other tech stocks–sliding as investors unwind their positions due to overvaluation concerns, Twitter is firmer.

Still, their financial position isn’t stopping them from issuing a hybrid debt where purchasers will convert their principal and accrued interest into stocks later.

The Twitter convertible bond offering will be private, open for institutional buyers, and will be unsecured. Interests will be payable semi-annually in arrears.

A portion of funds raised will be used for covering the cost of the convertible note hedge transactions. Additionally, they will use them for general corporate purposes, including “capital expenditures, working capital, and potential acquisitions.”

Twitter May Purchase Bitcoin if “Vendor or Employee Asks for Payment in BTC”

It is not clear what company/asset Twitter plans to acquire in the years ahead. However, the crypto community knows that the social media giant has a neutral to bullish view on crypto, especially Bitcoin.

In early February, its Chief Financial Officer (CFO), Ned Segal, said they were considering adding Bitcoin to their balance sheet. If any employee or vendor requests to be paid in BTC, he explains, the tech company will buy Bitcoin as part of its treasury.

“We’ve done a lot of the upfront thinking to consider how we might pay employees should they ask to be paid in bitcoin, how we might pay a vendor if they asked to be paid in bitcoin, and whether we need to have bitcoin on our balance sheet should that happen.”

Square Inc.’s Cash App, according to a BTCManager report, generated $1.63 billion in BTC revenue in Q3 2020, contributing to roughly 80 percent of the mobile payment service platform.

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Source: https://btcmanager.com/twitter-company-add-bitcoin-balance-sheet/