At the time of writing, bitcoin has taken a bit of a nosedive, though at $17,800, the currency is doing somewhat better than it was about 24 hours ago. The currency initially lost more than $2,000 off its price to trade in the low $17,000 range, and many analysts began to show some concern that BTC’s all-time high wouldn’t be reached this year.
Bitcoin Buying Is Continuing to Surge
However, prior to all this negative hoopla, the currency was ascending like it never had before. Quite frankly, one could still argue that it’s in a solid place, and many individuals couldn’t help but rack their brains for an answer regarding why the world’s largest and most popular digital asset – which had been trapped in a rather lackluster position over the past year and a half – was suddenly on the ascent.
Well, according to some industry experts, the answer has to do with PayPal. Yes, the company is allowing users to buy crypto through its site. Yes, the company is allowing users to purchase items and services with bitcoin and other forms of digital currency, but this pales in comparison to what they believe is the real reason. Apparently, PayPal is buying up almost 70 percent of the new bitcoins that are being mined, meaning the company is set to own nearly three-quarters of the new BTC supply.
The news comes by way of Pantera Capital, which claims in a recent statement that thanks to PayPal, there is likely to be a bitcoin shortage in the coming weeks and months thanks to its newfound purchases. In the statement, the firm explains:
When PayPal went live, volume started exploding. The increase in [the Paxos-run bitcoin and crypto exchange] itBit volume implies that within four weeks of going live, PayPal is already buying almost 70 percent of the new supply of bitcoins.
Allegedly, this has set off a buying phase amongst people who were afraid that they would not have the opportunity to add crypto to their own portfolios given that PayPal was taking everything for itself. With so many people looking to purchase, the price had no choice but to go up significantly.
The statement goes on to say:
This rally is much more sustainable than 2017. One of the main differences is the ease of investing in bitcoin now via PayPal, Cash App, Robinhood, etc.
The People Are Doing the Heavy Lifting
Eduardo Arenas – director of Bitso Alpha, a crypto exchange in Latin America – mentions that there is a huge wave of new bitcoin users and bitcoin buyers, and that while PayPal likely inspired the price action, individual traders are the ones keeping it up. He says:
We’re seeing waves of new users when price action begins, but more importantly, we have seen important user growth during quieter times over the past year.