Fundamental analysis: Square continues to invest in crypto
Square, a fintech company founded by Twitter CEO Jack Dorsey, purchased a further $170 million in Bitcoin, according to its fourth-quarter financial report.
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In the report, Square said it bought roughly 3,318 bitcoins, after buying 4,709 for the first time, in October 2020. The company said Bitcoin accounts for 5% of its total assets as of the end of last year. Dorsey has voiced his support for Bitcoin several times in the past.
“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,” said Dorsey.
Bitcoin is progressively winning mainstream acceptance, prompting major companies to invest in the cryptocurrency. Square is a fintech company which operates a popular CashApp.
Electric vehicle (EV) manufacturing giant Tesla bought $1.5 billion in Bitcoin earlier this month for “more flexibility to further diversify and maximize returns on our cash.” Enterprise software company MicroStrategy has also announced on Wednesday that it has purchased more than $1 billion worth of additional Bitcoin, taking its total holdings of the cryptocurrency to 90,531.
However, other investors and companies are still feeling skeptical about Bitcoin due to its high volatility, Wedbush analyst Daniel Ives said that Tesla’s stock price is now strongly correlated with Bitcoin.
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Technical analysis: A bearish move next?
Litecoin price is up over 23% in February, but the overall price action isn’t really promising. This month’s high of $247 is a new three-year high for the digital asset. For the second consecutive month, LTC buyers have failed to close above the $180 mark.
Currently, the price action is trading over 30% off the highs set only a week ago. These failures to secure a higher monthly close may result in a rotation to, at least, $140. A deeper correction could yield a rotation lower to the $100 mark that will allow an opportunity to buy Litecoin again.
Jack Dorsey’s Square bought an additional $170 million in Bitcoin as the accelerated crypto adoption continues.