PayPal is buying almost all newly minted Bitcoins, and this is raising the price
PayPal’s entry into the cryptocurrency market could have a significant impact on the price of Bitcoin (BTC).
In a recent report, the cryptocurrency investment firm Pantera Capital said that the shortage of Bitcoin is the main reason for the recent price increase, as most newly minted BTCs are being purchased by PayPal.
PayPal’s new crypto service „is already having a huge impact,“ explains Pantera, pointing out that the payments giant is acquiring 70% of all new BTCs in circulation.
Quoting the itBit data, Pantera says:
„When PayPal’s service became active, volumes exploded. The itBit data shows that, four weeks after the launch, PayPal has already purchased almost 70% of the new Bitcoin offer“.
According to Pantera, only PayPal and Cash App could be buying all the new Bitcoins.
Bitcoin’s monetary policy has been designed to be deflationary over time. With large-scale adoption, demand will increase exponentially but supply will remain fixed. According to Pantera, the combination of these two factors is contributing to Bitcoin’s parabolic growth.
PayPal launched its crypto services in the United States earlier this month, allowing customers to buy and sell up to $20,000 in Bitcoin per week. The platform will be launched globally in early 2021. The company has over 300 million active users, making its entry into the crypto industry very important for adoption.
Pantera also points out that today it is much easier to buy Bitcoin than in 2017. Wider adoption of cryptocurrency would be more likely to keep prices high: although BTC remains highly volatile, it has experienced a long period of stability before the parabolic growth of the last two months.