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Bitcoin nears $60,000 again on renewed institutional backing from PayPal, Visa, CME

Bitcoin nears $60,000 again on renewed institutional backing from PayPal, Visa, CME

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Insider | 2021/04/02

Bitcoin on Wednesday flirted with the $60,000 level anew in an attempt to breach its all-time high set in March. Wider adoption of the world's largest cryptocurrency by market capitalization has renewed the interest in bitcoin this week.

On Wednesday, the price of bitcoin rallied to an intraday high of $59,738 early morning Eastern before dropping back to the $57,000-level. The cryptocurrency is trading higher by 0.98% to $59,413 as of 2:53 pm Eastern.

"The bitcoin rally may be partly fueled by institutional involvement with recent announcements from Visa and PayPal inspiring new all-time highs last night," Paolo Ardoino, CTO of cryptocurrency exchange Bitfinex, told Insider. "Payments as a use case are becoming more and more tangible to fintech companies and their customers, which might mean curiosity from retail investors.

On Tuesday, PayPal said its US customers can use their cryptocurrency holdings to pay at millions of its online merchants globally. This means that customers can convert bitcoin and ether, among others, to fiat currencies at checkouts to make purchases.

CME Group, the world's largest derivatives marketplace, also on Tuesday revealed that it is expanding its suite of crypto offerings with micro bitcoin futures. These will be one-tenth the size of one bitcoin, allowing investors to trade bitcoin at a lower cost, and will start trading on May 3, pending regulatory review.

Visa meanwhile announced Monday that it will enable the use of USD Coin to settle payment transactions on its platform via Crypto.com. The payments firm plans to allow more partners the same route later this year.

Bitcoin this year has risen around 103% and has surged more than 600% in the past 12 months. It breached the $1 trillion market capitalization mark for the first time and also broke past the $60,000 level in February. Bitcoin bears have long criticized the cryptocurrency as being a speculative bubble ready to burst on top of having no intrinsic value. But advocates believe otherwise.

"I do not think there's a bubble in bitcoin or cryptocurrencies," John Wu, president of AVA Labs, told Insider. "Bitcoin volatility on an annualized basis is just under 100%. So we have a highly volatile asset class."

While bitcoin saw a correction leading to Friday when a record number of options expired, the price did not move as much as investors expected.

"After the quarter-end expiration last Friday, investors aggressively rolled their short positions to both month-end and quarter-end options with newly released margin," Annabelle Huang, head of GlobalX at Amber Group, told Insider. "Though spot gained bullish strength over the weekend, the constant options selling flow drove IVs [implied volatilities] of each term dropping to 3 months low."


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