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Daily Bitcoin Analysis

Daily BTC Analysis: The Weekender

Sunday, April 4, 2021

Welcome to the Easter Weekender! We had a top week of news, so let’s find out which stories our readers clicked the most. This week we start with the two payment giants: Paypal and Visa.

On Monday, the American multinational financial services corporation Visa announced that digital currency payments have arrived on Visa’s settlement platform. The payment giant revealed that the company will leverage USD coin (USDC), the regulated token built on top of the Ethereum network.

“The announcement today marks a major milestone in our ability to address the needs of fintechs managing their business in a stablecoin or cryptocurrency, and it’s really an extension of what we do every day, securely facilitating payments in all different currencies all across the world,” Visa said during Monday’s announcement.

On Tuesday, Payments giant Paypal launched the “Checkout With Crypto” service to allow consumers to make payments at millions of merchants using cryptocurrencies in their Paypal wallets. “This is the first time you can seamlessly use cryptocurrencies in the same way as a credit card or a debit card inside your Paypal wallet,” said Paypal’s CEO.

“Checkout with Crypto will automatically appear in the Paypal wallet at checkout for customers with sufficient cryptocurrency balance to cover an eligible purchase,” the announcement added. “All transactions are settled in USD and converted to the applicable currency for the business at the standard Paypal conversion rates.”

Investment bank Goldman Sachs has confirmed it is close to offering crypto to its private wealth management (PWM) clients and has appointed a new global head to manage the segments.

In an internal announcement shared with CoinDesk, Goldman Sachs said Mary Rich has been promoted to global head of the Digital Assets Group for private wealth management at the bank and will work with advisors to educate clients about digital assets and blockchain technology.

In an interview with CNBC, Rich said the bank is offering a “full spectrum” of investments in bitcoin and digital assets, “whether that’s through the physical bitcoin, derivatives or traditional investment vehicles.”

"We are working closely with teams across the firm to explore ways to offer thoughtful and appropriate access to the ecosystem for private wealth clients, and that is something we expect to offer in the near-term,” Rich told CNBC.

Square Inc’s chief financial officer Amrita Ahuja believes that more companies should consider adding Bitcoin to their balance sheet.

In an interview with Fortune magazine, Ahuja says there’s always an argument for companies to include the leading crypto asset in their war chest.

“There’s absolutely a case for every balance sheet to have Bitcoin on it.”

Square has so far bought 8,027 Bitcoin. The investment cost the mobile payment solutions provider $220 million, but the value of its crypto holdings has more than doubled to $471.3 million, according to BitcoinTreasuries. Ahuja says Square intends to keep Bitcoin on its balance sheet for the long haul.

“The investment that we made on our balance sheet for Bitcoin represents about 5% of our cash; we intend to hold for the long term here.” The Square CFO added that she believes cryptocurrencies have the potential to extend the capabilities of the traditional financial system. “We see Bitcoin and cryptocurrencies as expanding access to financial services, especially when you think more globally.”

Finally we end with the news that U.S. President Joe Biden is creating more legislation that may lead to a massive $3 trillion package dedicated to domestic needs and infrastructure. The recent discussions with Biden and Senate Democrats honed in on the political party’s “Build Back Better” campaign. The recent stimulus talks have a few economists feeling optimistic about the future of the American economy, while Treasury Secretary Janet Yellen has said: “the next stimulus bill will have to be paid for through higher tax rates.”

The U.S. government doesn’t seem to want to stop creating money, as talks of passing more stimulus legislation have increased almost right after the passing of $1.9 trillion just a few weeks ago. Despite the fact that average Americans are concerned about purchasing power and inflation, central bank members and politicians continue to find ways to create more funds.

Technical Analysis

Despite holding onto last weekend's rally, Bitcoin has struggled to push higher. A brief touch of $60,000 has not hidden the obvious: Bitcoin can't close above $58.820.

Failure to trade $58,820 early this week will disappoint the bulls and will likely lead to quickly testing support at $56,600. A break here will see prices slide further, with $54,225 the key level for the bulls to defend ahead of deeper losses and a retest of $50,225.

A close above $58,820 and the market will push up towards $60,000 and beyond. There has been a wall of selling around the $60,000 level, but once this is absorbed, prices will likely jump higher in search of $61,705. If momentum should take us through, then a new ATH awaits.

The Market in Numbers

This Weekend's Coffee Reading

Pension funds and insurance firms open up to Bitcoin investment proposal

Bitcoin’s appeal among institutional investors is spreading toward insurance firms and life and annuity companies.

Life and annuity companies are increasingly dedicating part of their asset base to Bitcoin (BTC). While the top crypto has delivered the best returns over the past decade, the long-talked-about institutional herd seems to be finally making its way to the BTC market.

During the bear market of 2018, Bitcoin developmental efforts from multiple stakeholders seemed to focus on improving BTC’s regulatory stance. These efforts saw the emergence of institutional-grade custody platforms among other prerequisites needed for greater participation by regulated entities.

Over the last year, publicly listed firms have begun to add Bitcoin to their balance sheets, citing fiat currency debasement concerns. Significant cash influxes by major central banks to support stimulus packages enacted by governments to soften the economic blows struck by the coronavirus pandemic has market commentators fearful of rising inflation.

With pension funds and insurance firms joining other public corporations in investing in Bitcoin, attention is now shifting to whether governments themselves will begin to invest in BTC via their sovereign wealth funds. Meanwhile, 2021 remains a bullish year for the largest asset by market capitalization with its March closeout representing the best Q1 performance in eight years.

As previously reported by Cointelegraph, KiwiSaver, a $350-million retirement plan operated by New Zealand Funds Management, recently allocated 5% of its assets into Bitcoin. At the time, James Grigor, chief investment officer at NZ Funds, remarked that Bitcoin’s similarities to gold make BTC an attractive asset for life and annuity firms.

According to Grigor, NZ Funds amended its offer documents back in 2020 to include cryptocurrency investments in its catalog. This move allowed the company to purchase BTC back in October when Bitcoin was trading around the $10,000 price mark.

In less than six months, NZ Funds’ KiwiSaver product is now likely sitting on almost six-fold profit on its Bitcoin investment. For the NZ Funds’ executive, Bitcoin presents another set of opportunities outside the usual traditional asset route.

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