As of now, bitcoin has taken a tailspin, although, at $17,800, the currency is doing better than it was 24 hours ago. The currency lost more than $2,000 off its price to trade in the low $17,000 range, and many analysts are showing some concerns that BTC’s all-time high wouldn’t be reached this year.
Bitcoin Continues to Surge
Before all the negative remarks, the currency was ascending like it wasn’t before. Frankly, one can still argue that it is in a stable place, and many people can’t help but think for an answer about why the world’s largest and most popular digital asset which hadn’t been trapped in a rather lackluster position in the past year and a half and was on the rise.
According to some industry experts, the reason behind this is with PayPal. The company is allowing users to buy crypto on its site. The company allows the users to purchase items and services with bitcoin and other forms of digital currency, but it fades compared to what they believe is the real reason. PayPal buys up to almost 70% of the new bitcoins that are being mined; it means that it is set to own three-quarters of the original BTC supply.
The news came from Pantera Capital, which claimed in a recent statement that is because of PayPal, there seems to be a bitcoin shortage in the next weeks and months because of its newfound purchases. In the report, the firm elaborates:
“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.”
This has set off a buying phase among the people who were afraid that they would not have the opportunity to add crypto to their portfolios, given that PayPal was taking everything for itself. With many people wanting to purchase, the price will only have to go up meaningfully.
The statement goes on to say:
“This rally is much more sustainable than in 2017. One of the main differences in the ease of investing in bitcoin now via PayPal, Cash App, Robinhood, etc.”
People do the Heavy Lifting
The director of Bitso Alpha, Eduardo Arenas, mentions a massive wave of new bitcoin users and bitcoin buyers. While PayPal inspired the price action, individual traders are the ones that are 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.”
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