Bitcoin eludes NASDAQ correlation – price hits two-week high
Bitcoin has pulled away from fluctuating price trends in the Nasdaq Composite – helped by further signs of institutional interest in the cryptocurrency sector.
The BTC/USD exchange rate rose 3.96 per cent to a two-week high of $54,489 – after a report from Goldman Sachs revealed that 40 per cent of its clients now have Ethereum Code exposure to cryptocurrencies and 70 per cent of them believe the cost of buying a bitcoin (to buy bitcoin cheap platform comparison) will reach $100,000 in 2021.
Goldman’s report emerged a week after it announced it would relaunch its cryptocurrency trading desk. The banking giant had shut down the said platform in 2018 in response to Bitcoin’s wild downward trajectory, which eventually saw its prices crash from $20,000 to $3,200 in just one year.
But between March 2020 and February 2021, the flagship cryptocurrency rose from $3,858 to more than $58,000 as traders and investors bought BTC as insurance against global central banks‘ quantitative easing programmes.
Speculators noted that Bitcoin’s limited supply of 21 million tokens made it more attractive than holding cash, which has an unlimited supply.
Nasdaq firms Tesla and MicroStrategy jumped on Bitcoin with the same narrative, citing the year-long decline of the US dollar in 2020 against the rising US national debt (it has passed the $21 trillion mark).
That also prompted services giants like PayPal, MasterCard, Bank of New York Mellon and Goldman Sachs to announce Bitcoin-enabled products ranging from custodial services to trading portals.
Bitcoin reached its highest level in history at $58,367 on 21 February, but lost about 26 percent of its valuation due to unsupportive macro narratives. A dramatic rise in long-dated US government bond yields reduced the attractiveness of assets that performed extremely well during the coronavirus pandemic.
This caused Bitcoin and the technology-heavy Nasdaq Composite to develop a positive correlation.
As yields stabilised near their one-year highs, Bitcoin attempted a decent recovery. Between 28 February – the day the cryptocurrency formed a session low of $43,016 – and 9 March, the BTC/USD price recovered more than 25 per cent to $54,489.
On the other hand, the Nasdaq plunged 2.4 percent in a technical correction.
Bitcoin’s upward moves this week came in the wake of new institutional integrations
On Monday, oil billionaire Kjell Inge Rokke’s company Aker ASA launched a new arm dedicated to Bitcoin – buying about 1,150 BTC for the wing’s treasury reserves. Over the weekend, Meitu Inc, a Chinese photo-editing app, said it had added Bitcoin and Ethereum to its balance sheets.
Cathie Woods, founder/CEO/CIO of ARK Investment Management LLC, said in a recent interview with CNBC that more companies would buy bitcoin as they sit on tens of billions in cash reserves. She expects BTC/USD to reach $60,000 in March.