Bitcoin (BTC) recovered on Wednesday, surging to $50,000-level a few days after a sharp downturn. The world’s largest digital currency soared again following news about payment firm Square’s $170 million Bitcoin purchase and bullish comments from Cathie Wood on the crypto.
Ark Investment Management CEO Cathie Wood’s comments on Bitcoin have also contributed to the digital currency’s 7.5% increase. Cathie said that she is “very positive on bitcoin” despite the recent price dip.
“We’re very positive on bitcoin. I’m very happy to see a healthy correction here. No market is straight up. Everyone should know that. Everyone should have some dry powder for days like these.And that can happen in two ways. It can happen with inflation. Bitcoin, I think, is the best hedge against inflation out there bars none, better than gold. Cathie said.
“If you think there’s a 5% chance of that happening, you should put 5% of your portfolio long-term – or your wealth – into something like bitcoin. You can carry the keys in your head across the border.” ” She added.
The digital currency plunged to as low as $45,000 on Tuesday. The dip followed Elon Musk’s comments on Bitcoin and Ethereum price. Musk said that the price of the digital currencies “seem high” resulting in a 17% downturn to Bitcoin.
Ironically, Musk’s Tesla (NASDAQ: TSLA) invested about $1.5 billion Bitcoin earlier in January. The billionaire’s comments not only resulted in Bitcoin losing its value; even Tesla’s shares plunged because of the Bitcoin price plummet.
Cathie Wood isn’t the only reason behind Bitcoin surge
On the other hand, Square said Tuesday that it bought 3,318 Bitcoin at the price of $170 million representing about 5% of the company’s total marketable securities, cash, and cash equivalents. In October, Square purchased 4,709 bitcoins for $50 million.
“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,” the company said.
Meanwhile, analysts argued that digital currencies highly volatile market is something normal for a young market.
“We may be seeing some price fluctuations that can be expected in a nascent space. Such criticism misses the point and the profound impact it is starting to have. For many of the battle-tested exchanges that have weathered the market fluctuations, volatility isn’t new and is to be expected in such a young market.” Paolo Ardoino, Bitfinex CTO, told Insider.