Bitcoin price recovers to $50,000 after more buying from Square

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Bitcoin price roared back Wednesday after a sharp sell-off, increasing to $50,000 again as Square announced it had bought $170 million worth of Bitcoin.

Other cryptocurrencies also got a boost, with Ethereum (ETH) and XRP climbing 11.3% and 7.4% respectively. So-called altcoins, or alternative cryptocurrencies, often surge in times of strength for bitcoin.

Square disclosed in fourth quarter earnings on Tuesday that it had purchased 3,318 Bitcoin for a combined $170m. The investment follows a $50m purchased disclosed last October and means Square now has 5% of its total assets invested in the flagship cryptocurrency.

“Square believes that cryptocurrency is an instrument of economic empowerment, providing a way for individuals to participate in a global monetary system and secure their own financial future,” the company said in a statement.

“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 news helped to stabilize the price of bitcoin and reverse earlier losses. Bitcoin had dropped over 10% earlier on Tuesday, leading a broader cryptocurrency market sell-off. Bitcoin was trading around the $45,000 mark at its worst point.

At the time of writing and after Square announcement, bitcoin price had recovered to trade at $50,516.

The market pullback at the start of the week followed a big rally for bitcoin that started last October. Earlier this month bitcoin hit a new all-time high above $58,000, which marked a more than 400% rise over the last five months.

The rally has coincided with increased institutional and retail investor interest. Alongside Square, Elon Musk’s Tesla (TSLA) has also invested some of its assets into the cryptocurrency. The electric car maker has put $1.5bn into the cryptocurrency. PayPal (PYPL), Mastercard (MA), and BNY Mellon have all announced plans to handle bitcoin on behalf of customers.

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