Connect with us

Bitcoin

Bitcoin Starting to Lead FX Markets, Analysis of Tesla Reaction Shows: Report

Published

on

Bitcoin Starting to Lead FX Markets, Analysis of Tesla Reaction Shows: Report

In a sign of continued maturity as a macro asset, bitcoin now looks to be leading the price action in the foreign exchange markets (FX).

“The dollar slid back to flat on the day on Monday after a surge in bitcoin to record highs foiled the U.S. currency’s attempt to rally back from [U.S. nonfarm] payrolls-inspired losses in the previous session,” a Reuters article published earlier this week says.

The article claims that the Tesla-led rally in bitcoin (BTC) helped EUR/USD (euro-dollar exchange rate) extend Friday’s gains in the wake of dismal eurozone investor confidence data.

A closer look at the two markets’ price action shows that EUR/USD, the most liquid currency pair globally, tracked bitcoin higher following the Tesla news.

EUR/USD broke out of a descending channel (above left) at 14:00 UTC on Monday, signaling a continuation of Friday’s rise from 1.1990 to 1.2040, which was fueled by the dismal U.S. nonfarm payrolls (labor market) data.

Notably, the currency pair’s breakout happened at least an hour after Tesla news propelled bitcoin to new highs above $42,000. The U.S. electric car maker disclosed its bitcoin investments worth $1.5 billion, validating the cryptocurrency’s appeal as a reserve asset.

It does appear as though FX traders sold dollars, lifting EUR/USD higher, as the greenback took a hit against bitcoin, a perceived inflation hedge/digital gold. It’s worth noting that macro factors such as Eurozone’s slow vaccine delivery and relatively tepid economic recovery favored a drop in EUR/USD.

Both bitcoin and EUR/USD have remained largely bid ever since. The cryptocurrency set a new peak price of $48,925 early Friday, while EUR/USD is now trading above 1.2100.

While it may be too early to call bitcoin a lead indicator for the FX markets, analysts are confident that the cryptocurrency is heading in that direction.

“While I certainly think this may be where we’re headed, bitcoin still has some more maturing to do before we get there,” Joel Kruger, a currency strategist at LMAX Digital, told CoinDesk in a Telegram chat.

The crypto community considers bitcoin as a better store of value and medium of exchange than the U.S. dollar and fiat currencies in general. That’s because bitcoin’s pace of supply expansion is cut by half every four years, which is in stark contrast to expansionary (inflationary) monetary policy implemented by the U.S. Federal Reserve and other major central banks.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Bitcoin

MicroStrategy Dumps Over $1 Billion on Bitcoin, Now Holds $4.78 Billion BTC

Published

on

Bitcoin

MicroStrategy Dumps Over $1 Billion on Bitcoin, Now Holds $4.78 Billion BTC

MicroStrategy, a business intelligence firm, announced it has purchased another 19,452 Bitcoin worth $1.026 billion.

The company joined Square and other companies that bought the dip witnessed earlier this week after Elon Musk, Bill Gates and Janet Yellen commented on the fast-rising digital currency.

MicroStrategy now holds 90,531 Bitcoin worth $4.78 billion, more than Elon Musk’s Tesla acquisition of $1.5 billion.

Michael Saylor, the Chief Executive Officer (CEO), MicroStrategy continues to pursue a coin acquisition strategy now codified in the business intelligence company’s mission.

Square purchased 3,318 Bitcoin at an estimated $170 million value on Tuesday when the world’s most dominant cryptocurrency dipped to $45,000 before rebounding to the current level.

Bitcoin presently trading at $49.233.71 per coin as of the time of writing.

Continue Reading

Bitcoin

Bitcoin Rebounds To $50,881 Per Coin on Wednesday

Published

on

Bitcoin

Bitcoin Rebounds To $50,881 Per Coin on Wednesday

Following Elon Musk, Janet Yellen and Bill Gates’ comments that plunged the world’s new gold, Bitcoin, on Monday, the digital asset has rebounded from $48.321 per coin to $50,881.63 as of 10 am Nigerian time on Wednesday.

Bitcoin gained 5 percent in the last 24 hours due to the surge in transactions by investors after Square, a payments giant, announced it has added 3,318 Bitcoin valued at $170 million to its holding of the coin on Tuesday.

Investors carried out 288,011 transactions valued at $16.91 billion in the last 24 hours.

Bitcoin briefly rose to as high as $51,413.61 to pare losses and extend year-to-date returns to 72.29 percent.

The digital currency was trading at an all-time high of $58,332.36 per coin before Elon Musk, the then world’s richest man said the dominant cryptocurrency is “too high too fast”.

Also, Bill Gates, in a recent interview with Bloomberg, said he is not bullish on Bitcoin. The third richest man in the world and the founder of Microsoft said, bitcoin uses too much energy and can cause a lot of trouble for investors who may not have much money to spare like Elon Musk.

He said “Elon has tons of money and he’s very sophisticated, so I don’t worry that his Bitcoin will sort of randomly go up or down,” Gates said during the interview. “I do think people get bought into these manias, who may not have as much money to spare, so I’m not bullish on Bitcoin, and my general thought would be that, if you have less money than Elon, you should probably watch out.

Janet Yellen, the former Chair of Federal Reserve and the present Treasury Secretary of the United States has been vocal about the environmental impact of Bitcoin given the amount of power needed to mine digit tokens.

I don’t think that bitcoin is widely used as a transaction mechanism,” Yellen told the New York Times on Monday. “It’s an extremely inefficient way of conducting transactions and the amount of energy that’s consumed in processing those transactions is staggering.

Continue Reading

Bitcoin

Elon Musk Net Worth Tumbles With Bitcoin Value

Published

on

elon musk

Elon Musk Net Worth Tumbles With Bitcoin Value

The now second richest man in the world, Elon Musk, has experienced a decline in his total net worth following a comment he made that Bitcoin value is too high and too fast.

Elon Musk’s net worth plunged by $15.2 billion in the last 24 hours to N183 billion, according to the latest data from Bloomberg.

The former world’s richest man has grown his net worth by $13.6 billion in 2021 alone. This represents an over 61 percent decline from over $20 billion gain posted last week.

In early February, the value of Tesla and Bitcoin rose substantially immediately Tesla announced it invested $1.5 billion in Bitcoin.

Cryptocurrency-focused investors jumped on Tesla stocks because of its exposure to Bitcoin, these same investors have started dumping the company’s stocks following Musk’s comments.

Tesla stocks dropped by $66.80 or 8.55 percent to $714.50 per share.

While Bitcoin valued plunged by over 17 percent from $58,000 to $47,226.88 with market value declining from $1 trillion to $880.11 billion.

 

Continue Reading

Trending