Bitcoin

Bitcoin just got a big new buyer. Should you follow their example?

Published

11 months ago

12 May, 2024

Bitcoin just got a big new buyer. Should you follow their example?

This billionaire’s Bitcoin investment plan follows a solid, fundamental approach to purchasing volatile assets.

The price of Bitcoin (Bitcoin 1.03%) is mainly determined by law of supply and demand. Since there is a fixed supply of the cryptocurrency, increasing demand will lead to a higher price. And demand may be increasing due to a large new buyer.

Jack Dorsey, the fintech CEO Block (SQUARE -2.58%), dedicated his entire Q1 letter to shareholders to talk about Bitcoin. Among his comments, he noted that Block will commit to using 10% of its gross profit from its various Bitcoin-related products to purchase Bitcoin as an investment every month.

In the first quarter, Block’s gross Bitcoin profit was $80 million, which would result in an $8 million investment in Bitcoin under the new plan. That number is an increase: the first monthly purchase in April totaled $4.4 million.

It’s a big investment, for sure, but it won’t significantly move the Bitcoin market, which has a value of US$1 trillion. market value. However, Dorsey is encouraging other companies to follow his example, including offering Square sellers the ability to automatically invest up to 10% of their gross profits in Bitcoin as well. And that could significantly increase demand.

Image source: Getty Images.

Dorsey’s plan is easy to follow

Dorsey encouraged other business owners to invest heavily in Bitcoin through Block’s “open source” investment plan. He calls it the Bitcoin Blueprint for Corporate Balance Sheets. The plan is not very complicated and individuals can easily replicate it.

The core of the plan is to systematically dedicate 10% of Block’s gross profit from its Bitcoin products every month to purchasing Bitcoin. This is a way of dollar cost average, which generally involves investing equal dollar amounts in a security over time. Consistently purchasing an asset over time smoothes the average price paid per unit. When the price goes up, you will buy fewer units, and when the price goes down, you will buy more. This can be a great way to accumulate a volatile asset like Bitcoin.

Dollar-cost averaging solves many challenges involved in investing in Bitcoin. “Bitcoin’s price can be highly volatile and difficult to predict, as its price action does not always correlate with existing asset classes,” Dorsey wrote in his blueprint. “We believe this approach allows us to optimize our long-term investment position while minimizing the price risks associated with trying to aggregate larger, less frequent purchases.”

Because Block’s purchases will be relatively large, the company will execute trades within a specific two-hour window every month when liquidity is high. It uses a special order type – called time-weighted average price (TWAP) – designed to have the smallest possible impact on the market price.

However, since the price of Bitcoin is largely determined by supply and demand, a large investor who enters the market with plans to hold Bitcoin indefinitely will, over time, drive up the price of Bitcoin if all rest is the same.

Anyone can replicate this plan if they want to invest in Bitcoin. Simply take 10% of your monthly savings (or whatever amount you feel comfortable investing) and use it to buy Bitcoin. Over time, you will accumulate a considerable position.

Why Now Could Be a Great Time to Invest

Dorsey’s commitment to continually investing in Bitcoin and keeping it on Block’s balance sheet could be a sign of greater adoption of the asset by institutional investors. And this could be a huge catalyst for the price of cryptocurrency.

At the end of the first quarter, Bitcoin represented approximately 9% of Block’s cash, cash equivalents and marketable securities on its balance sheet. This may not seem like much to the average crypto investor, but to a large investor it is quite a lot.

The good news: it is becoming easier and more acceptable for large institutional investors to buy Bitcoin. This is partly due to the new spot Bitcoin ETFswho directly hold Bitcoin.

Cathie Wood’s ARK Invest estimates that if institutional investors allocated just 1% of their holdings to Bitcoin, it could push the price to $120,000, and an aggregate allocation of 4.8% would push the price to $550,000.

We are still in the early stages of adoption by institutional investors. As more companies, investment managers and individuals decide to buy Bitcoin, this could have a profound impact on its price. Block is making it easier for individuals and small businesses to invest, but there is still plenty of room for large institutions to increase their holdings.

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Bitcoin

What to watch for in the markets

Published

9 months ago

21 July, 2024

SatoshiTimes Staff

Photo: Andrew Harnik (Getty Images)

After witnessing one of the largest global IT outages on record, affecting the travel, finance and healthcare sectors worldwideThis week is set to see more political drama, events, and earnings reports from tech giants.

Donald Trump’s ‘Lovefest’ Sets Jamie Dimon Up for Consideration for Treasury Secretary Job

Let’s take a look at what awaits us:

Major companies will release their earnings reports

Major tech companies and others will release their earnings reports this week, paving the way for what the second half of 2024 will look like.

Monday

Verizon will report earnings before the start of operations.

Tuesday

Coca-Cola, Comcast and UPS are all set to report earnings before the market opens.
Tesla will report earnings in the morning, while General Motors will report earnings in the evening.
Alphabet and Visa will report results after the market closes.

Wednesday

AT&T will release its report before the market opens.
Ford and Chipotle will report earnings after the market closes.

Thursday

Earnings reports from AstraZeneca, American Airlines and Southwest Airlines will be released before the market opens.

Trump to speak at Bitcoin conference

Presumptive Republican presidential nominee Donald Trump will speak at the next Bitcoin Conference in Nashville, Tennesseewhich is scheduled for July 25-27. While this is the first time a presidential candidate will attend the conference, it has sparked a debate over whether the crypto-friendly Trump will receive support from the crypto community in the upcoming election.

In addition to Trump, independent presidential candidate Robert F. Kennedy Jr. will also discuss crypto during the conference. Crypto advocates such as ARK Investment’s Cathie Wood, MicroStrategy’s Michael Saylor, and whistleblower Edward Snowden are among some prominent names who will be participating in the conference.

Ether ETFs are on the way

New Ether Spot ETFs are set to begin trading on Tuesday, July 23. Much like the spot Bitcoin ETFs, these ETFs will allow investors to buy the second most popular cryptocurrency like stocks. BlackRock, Ark Invest/21Shares, VanEck, Grayscale, Fidelity, Bitwise, Franklin Templeton, and Invesco/Galaxy Digital are all set to offer Ether ETFs. Crypto asset manager Bitwise predict that trading in the Ether ETF will drive the price of Ether higher, potentially surpassing $5,000.

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Bitcoin

Cryptocurrency’s Biggest Winners and Losers in a Second Trump Presidency

Published

9 months ago

21 July, 2024

SatoshiTimes Staff

Cryptocurrency’s Biggest Winners and Losers in a Second Trump Presidency

Bitcoin miners and cryptocurrency companies that have been blocked from going public in the U.S. could ultimately be the biggest winners in the digital asset world under a second Donald Trump presidency. Foreign companies at risk of losing market share could end up being the biggest losers.

That’s the view that’s taking hold among market participants and observers in the wake of the former president’s growing embrace of cryptocurrency as his chances of election grow. survey released Thursday by CBS News showed Trump with the majority — 52 percent — of likely voters in his likely November rematch with President Joe Biden.

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Bitcoin

Bitcoin, Ethereum, Solana and Cryptocurrency Markets Look Ready to ‘Send’ as Stars Align, According to Investor Chris Burniske

Published

9 months ago

21 July, 2024

SatoshiTimes Staff

Bitcoin, Ethereum, Solana and Cryptocurrency Markets Look Ready to ‘Send’ as Stars Align, According to Investor Chris Burniske

Cryptocurrency investor Chris Burniske says Bitcoin (BTC), Ethereum (ETH), Solana (SUN) and the cryptocurrency market in general seem poised for a run.

Former Head of Cryptocurrency at ARK Invest account his 292,200 followers on social media platform X that several catalysts are aligning, suggesting that digital asset markets are on the verge of a bull run.

According to Burniske, a partner at venture capital firm Placeholder, the highly anticipated launch of Ethereum-based exchange-traded funds (ETFs), Republican presidential candidate Donald Trump speaking at an upcoming Bitcoin event, and the current state of the BTC, ETH, and SOL charts all suggest significant optimism for the cryptocurrency markets.

“With ETH ETFs set to go live, Trump speaking at The Bitcoin Conference, and BTC, ETH, and SOL charts looking [they do] (while stocks are weak), it’s hard to imagine a world where we don’t ship next week.”

Reuters recently reported that preliminary approval for ETH ETFs has been granted as the Bitcoin Conference is scheduled to take place from July 25-27.

BTC, ETH, and SOL are trading at $67,333, $3,528, and $174 at the time of writing, respectively.

The venture capitalist too provides an update on his prediction that the total crypto market cap will eventually hit $10 trillion. According to his chart, the path to $10 trillion is currently “23%” complete, as it sits around $2.2 trillion.

Source: Chris BurniskeX

Earlier this month, Burniske he said in an interview with Real Vision CEO Raoul Paul that he has his eye on the Move ecosystem, which was originally built by social media giant Meta and then used to develop layer 1 blockchains Sui (IUE) and Apts (APT).

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Bitcoin

Here’s the next target for BTC before bulls can hold out for $70K

Published

9 months ago

21 July, 2024

SatoshiTimes Staff

Here’s the next target for BTC before bulls can hold out for $70K

Bitcoin’s recovery is going well, and the market is seemingly poised to create a new all-time high in the near term.

Technical analysis

Per NegotiationRage

The daily chart

As the daily chart shows, the price of Bitcoin has been rising since it broke above the 200-day moving average.

The market has also reclaimed the $60K and $65K levels and is moving towards the $68K resistance zone, which could be the last hurdle before creating a new all-time high. With the RSI also indicating that the price has clear bullish momentum, it could be just a matter of time.

Source: TradingView

The 4-hour chart

Looking at the 4-hour chart, it is evident that the price has been rising rapidly since breaking the downtrend line to the upside. The market also broke the $65K resistance level with momentum, turning it into a support.

While almost everything points to a new record high in the coming weeks, there is one worrying sign. The RSI is showing a clear bearish divergence between recent price highs, which could indicate a correction or even a reversal in the near term.

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