Monday 8 February 2021 12:18 pm

Bitcoin retests $40,000 as active addresses hit new all-time high

CryptoCompare data shows the price of Bitcoin (BTC) moved from around $34,000 to retest its all-time high near $42,000, but the price seemingly failed to break above $41,000 and has since corrected to trade at $39,000.

Ether (ETH), the second-largest cryptocurrency by market capitalization, started the week above $1,300 and moved steadily up to a new all-time high above $1,700 before bitcoin’s price correction took a toll on the crypto market and saw ETH drop to $1,600.

Cryptocurrency prices went up this week after Tesla CEO Elon Musk revealed he believes bitcoin is on the “verge of broad acceptance.” Speaking during a wide-ranging interview on the Clubhouse app, Musk said he believes BTC is a “good thing,” and added:

“I am a supporter of bitcoin. I am late to the party but a supporter. Bitcoin is on the verge of getting broad acceptance by traditional finance people.”

The Tesla CEO’s comments came at about the same time as those of Visa’s CEO Al Kelly spoke about the cryptocurrency during the company’s fiscal first-quarter 2021 earnings call, in which he described BTC as “digital gold.”

During the call, Kelly said the payments giant is in a position to make cryptocurrencies more “safe, useful, and applicable” and could even add them to the company’s payments network.

The CEO added that cryptocurrencies like bitcoin are “not used as a form of payment in a significant way at this point,” and said the company’s strategy is to work with wallets and exchanges to “enable users to purchase these currencies using their Visa credentials or to cash out onto our Visa credential to make a fiat purchase at any of the 70 million merchants where Visa is accepted globally.”

These endorsements came during the same week the number of active addresses on the Bitcoin network hit a new all-time high of more than 22.3 million addresses, topping the previous record of 21.6 million in December 2017. It’s worth noting that as anyone can create a bitcoin address for free, addresses cannot be used to measure the number of active Bitcoin users. Specifically how many people use BTC daily isn’t known.

The cryptocurrency’s price rise has seen bitcoin miner revenues surpass $1 billion in January. While the figure is impressive, it fell short of December 2017’s record $1.25 billion. The halving event of May 2020 cut block rewards in half, from 12.5 BTC t 6.25 BTC per block, significantly reducing BTC’s inflation.

The growing network has kept on attracting investors, so much so that PayPal’s CEO Dan Schulman revealed that “the volume of crypto traded on our platform greatly exceeded our expectations.” The company is set to invest “significantly” in its new crypto, blockchain, and digital currencies business unit to “help share this more inclusive future.”

PayPal has been letting users buy, sell, and hold BTC, BCH, ETH, and LTC via its platform since November 2020. During the earnings call, Schulman said that users who purchased cryptocurrencies through PayPal were logging in at “a rate 2x their login frequency” before buying crypto.

Investor and entrepreneur Dan Tapiero is launching a new $200 million fund to invest in cryptocurrency startups, called 10T Holdings, according to a filing with the U.S. Securities and Exchange Commission.

During an interview, the mayor of the city of Miami, Francis Suarez, revealed the city is considering letting employees receive their salary in BTC, while also considering allocating a portion of its treasury to the cryptocurrency.

These allocations are coming even after Bitcoin Core contributor and developer Andrew Chow has disclosed an “unexploitable vulnerability” affecting older versions of the software that has now been fixed and commonly affected web browsers.

Nigeria Orders Crypto Account Closures

The central bank of Nigeria has ordered deposit-taking banks and other financial institutions to shut down accounts transacting in or operating cryptocurrency exchanges, saying these deals are “prohibited.”

Failure to comply will reportedly lead to “severe regulatory sanctions,” according to a circular sent to financial institutions late last week and later published on the central bank’s website. The country’s Securities and Exchange Commission said back in September it would regulate cryptocurrency trades to protect investors and ensure transparency.

India is also reportedly planning to introduce a bill seeking to ban all private cryptocurrencies in the country during the budget session of parliament.

The proposed legislation would provide a framework for the creation of an official digital currency issued by the country’s central bank, the Reserve Bank of India, and allow specific exceptions to promote blockchain technology and its uses.

The Reserve Bank of India is, meanwhile, looking into the need for a digital version of the country’s fiat currency.

Francisco Memoria is a content creator at CryptoCompare who’s in love with technology and focuses on helping people see the value digital currencies have. His work has been published in numerous reputable industry publications. Francisco holds various Cryptocurrencies but has no bias in his writing.

Crypto AM: Market View in association with Ziglu

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