BTC breaks $50K as banks announce custody and MicroStrategy plans $600M investment

Bitcoin Moves OKCoin Bitcoin weekly market report. - BTC price

BTC breaks $50K as banks announce custody and MicroStrategy plans $600M investment

Bitcoin Moves #33 — A weekly review of what’s moving Bitcoin and crypto markets

Bitcoin finally breached the $50,000 mark this morning, after consolidating between $46K-$49K for most of February, per OKCoin market data.  

The strong consolidation over the past week enabled rallies in altcoins as some investors took profits on BTC and cycled that capital into other digital assets. 

As the price of BTC solidly passed the important psychological price point of $50K — reaching $50,600 on OKCoin spot markets, before receding to trade around $49,000 at the time of writing — Bitcoin continued to see a number of strong tailwinds that are likely to drive further growth in the coming weeks. 

For example, Twitter co-founder and CEO, Jack Dorsey (who’s also the founder and CEO of payments app, Square), seeded a new Bitcoin development fund in collaboration with JAY-Z. In another bullish sign for the leading cryptocurrency, major Wall Street banks continued to signal their support for BTC, adding to the mainstream legitimacy of the asset. 

TL;DR

  • Bitcoin broke through $50K today after bouncing between $46K and $49K this week.
  • BTC’s consolidation enabled some top altcoins to see double digit growth on the week.
  • Institutional players signaled their support for BTC and cryptocurrency, including BNY Mellon and, potentially, Twitter.

Market snapshot

All prices are in USD and time zones are PST.

  • Current BTC price: $49,082, up 6% from last week ($46,300)
  • 24H high: $50,610
  • 24H low: $47,080
  • 24H change: +1.5%
  • 24H BTC volume sits around $64 billion, down 22% from last week ($82 billion)
  • Total circulating BTC: 18,630,587
  • Bitcoin dominance: ~60.4%
  • 30D high / low: $50,600 / $31,700
  • 90D high / low: $50,600 / $17,000
  • Bitcoin Volatility Index (BVI), 30D: 1.62%, down 35% over the past week (2.5%)
  • Hash rate: 150.51 EH/s, down 9% over last week (164.88 EH/s)
  • Network value to transaction ratio (NVT): 78.4
  • U.S. dollar index (DXY): 90.58, up 1% from last week (90.48)
  • SPX-BTC 90D correlation: 0.102

BNY Mellon and Deutsche Bank look to support Bitcoin custody

Two major international banks, Deutsche Bank and BNY Mellon, are both reportedly thinking of entering the cryptocurrency custody market in the near future to expand into the growing market of digital assets.

BNY Mellon kicked off its involvement in the space last week when its chief executive of digital technologies said that “Digital assets are becoming part of the mainstream.” The executive added that:

“We have seen a surge in interest and demand from clients, and it is only natural that we bring our legacy of trust and innovation to be a first-mover in bridging the gap between traditional and digital assets.”

BNY Mellon is one of the world’s largest and oldest financial institutions. The firm has over $2 trillion worth of assets under management. 

It was also belatedly reported this past week that Deutsche Bank is looking into providing crypto custody for its institutional clients this year. 

Twitter CFO hints at Bitcoin plans

The CFO of Twitter has been keeping a close eye on Bitcoin, according to an interview on CNBC’s “Squawk Box” last week. During the interview, Ned Segal revealed that the social media giant was looking into giving its employees the option to be paid in BTC:

“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.”

While Twitter is looking into it, the firm has yet to take any moves to fully delve into the cryptocurrency space.

Jack Dorsey, the CEO and co-founder of the platform, is an openly ardent fan of Bitcoin. The executive has long held the cryptocurrency personally and already entered the space professionally via his other company, Square. The payments app not only allows its users to buy and sell Bitcoin, but also purchased $50 million worth of BTC late last year to supplement its balance sheet, for around 1% of its total assets. 

The comments on BTC from Twitter’s CFO come after Uber CEO Dara Khosrowshahi and GM CEO Mary Barra both said that their respective firms do not have plans to buy Bitcoin right now. 

Dorsey and JAY-Z seed Bitcoin development fund

Speaking of Dorsey, the Twitter and Square exec also announced this past week that he and hip-hop artist JAY-Z will be giving 500 BTC to a new endowment named “₿trust” to fund Bitcoin development. The project will be focused on funding development teams based in Africa and India, expanding the international nature of Bitcoin contributors.

This fund is currently worth around $24.5 million.

Elon Musk continues to discuss cryptocurrency

Last week, Tesla rocked the crypto market when it was revealed that the firm held $1.5 billion worth of Bitcoin, which it acquired using cash to hedge its balance sheet.

The CEO of Tesla, Elon Musk, continued to discuss the cryptocurrency this past week on Twitter. Commenting on a crypto wallet on Twitter on Feb 10, Musk said that “Any crypto wallet that won’t give you your private keys should be avoided at all costs.”

Musk has been quite open with his support of Bitcoin and other cryptocurrencies over the past few weeks.

As we covered in a previous edition of Bitcoin Moves, the technology entrepreneur, who also happens to be the most wealthy person in the world, said in a Clubhouse conversation that he thinks Bitcoin is a “good thing” and that he supports the cryptocurrency’s development. 

MicroStrategy doubles down on BTC with $600 million convertible note sale

MicroStrategy continued its notable investment streak in BTC on Tuesday morning, when Michael Saylor, CEO of the business analytics and services firm, revealed the company’s intent to raise capital to purchase Bitcoin.

The firm plans to raise $600 million by selling convertible senior notes, a type of high-priority corporate bond. This $600 million will then be used to purchase  BTC once the sale finishes.

If this sale succeeds, the firm will purchase approximately 12,000 BTC, assuming an average purchase price of ~$50,000.

The plan to buy $600 million worth of BTC comes just months after MicroStrategy raised $650 million from institutional players in December, which was used to purchase another large sum of bitcoin.

According to BTC data site BitcoinTreasuries, the firm currently holds over 71,000 BTC, currently worth around $3.5 billion.

After the past year of aggressively investing in the leading cryptocurrency, MicroStrategy is by far one of the largest public holders of BTC.

This latest decision to increase its Bitcoin holdings comes shortly after Saylor and the MicroStrategy team held a virtual conference that told corporate officers about Bitcoin and how they can integrate the asset into their respective businesses. 

BTC on-chain trends

According to blockchain analytics firm IntoTheBlock, BTC is “mostly bearish” at the moment, despite the bullish macro market situation for the cryptocurrency and the push above $50K. Five out of seven of the firm’s core metrics are currently printing a “bearish” reading — net network growth, in the money, concentration, large transactions, and the bid-ask volume imbalance.

The first four out of the five metrics listed above are “on-chain signals,” indicating that there has been a decrease in the usage of Bitcoin and dispersion of coins by some larger players.

While these short-term metrics are bearish, analysts have still noted that BTC is being accumulated en-masse by long-term holders. 

Bitcoin market signals. Source: IntoTheBlock

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