The sharp upward trend could be largely due to PayPal’s entry into the market, which is already causing a shortage.
PayPal’s entry into the crypto market could have dramatic consequences for Bitcoin’s ( BTC ) price
According to a new study by the crypto investment company Pantera Capital, a shortage of Bitcoin is the mainspring of the current price explosion, because the majority of the newly created BTC is being bought up by the large payment service provider.
Accordingly, the newly introduced integration of cryptocurrencies at PayPal „already has a major impact“, as Pantera thinks. PayPal alone is supposed to collect almost 70% of all new BTC.
Pantera refers to data from itBit:
“When PayPal introduced cryptocurrencies, trading volumes exploded. The increased trading volume at itBit suggests that PayPal is buying up almost 70% of all new Bitcoin within four weeks of its introduction. “
But that’s not all, because Pantera deduces from the available data that PayPal and payment service provider Cash App together claim all new Bitcoin for themselves
Bitcoin’s internal „monetary policy“ is programmed for deflation in the long term. As adoption increases, on the one hand purchasing power increases and on the other hand there is a shortage of the amount in circulation. Pantera sees the latter mechanism as the reason for Bitcoin’s parabolic upward trend .
PayPal has earlier this month crypto currencies introduced , which initially open to US customers only. Up to US $ 20,000 can be traded per week. In the spring of 2021, the service will then on the rest of the world widened to.
The large payment service provider has 300 million active users, which makes PayPal’s advance into a big step in the real mass suitability of the crypto market leader.
Pantera points out that it is currently much easier to buy Bitcoin than during the great crypto hype of 2017. In addition to PayPal, the American Cash App and the trading platform Robinhood also offer uncomplicated access for the mainstream.
Larger adoption inevitably means higher rates. Although Bitcoin is still exposed to strong price fluctuations, the market-leading crypto currency has recently remained stable for a long time before the current climbing party initiated a significant upward movement.