Bitcoin purchase by PayPal increases scarcity of BTC, says Pantera
Bitcoin (BTC) showed a rapid rise in its price.
Pantera Capital, an investment company, says its scarcity is responsible for the price dynamic.
The company believes that PayPal and Square bought BTC more quickly than their mining speed.
The Trust Project is an international consortium of media organizations based on transparency standards.
According to the investment company Pantera Capital, the surge in the price of Bitcoin Freedom review is due to PayPal. That said, it is not only the BTC purchase option on PayPal that is driving the price.
Last week, the value of Bitcoin increased by more than 14%. If it were a bank, Bitcoin would have been the largest in the world (last Friday, anyway). The explosion of BTC has also caused the growth of Altcoin, creating market capitalization sites filled with data in the green.
us fed balance sheet vs bitcoin price graph
Bitcoin skyrocketed as U.S. Federal Reserve balance sheet grew ?
There are many theories behind this bull run, as well as many predictions about its future trajectory. A director of Citibank said Bitcoin could exceed $318,000. Mike Novogratz pointed to a more realistic figure of $65,000. With the „network effect,“ he said, the institutional and corporate FOMO may just be getting started.
I bought more $BTC last night at 15800. It’s going to 20k and the. To 65 k. The network effect has taken over. I see tons of new buyers and there is very little supply. It’s an easier trade here that at 11k. So YES, buy it.
I bought over $BTC last night at $15,800. It goes up to $20,000 and the . A [sic] 65k. The network effect has taken over. I’m seeing tons of new buyers and there’s very little supply. It’s an easier trade at this point than at 11k. So YES, buy it.
Pantera Capital, an investment company involved in the world of crypto-money since 2013, however, has a different theory. Based on research, the firm described in a post on Medium how PayPal would be mainly responsible for the increase.
How does PayPal do it?
In October 2020, when PayPal opened up the world of cryptocurrency purchases, the price of Bitcoin rose considerably. According to Pantera, however, the real cause of this rally goes beyond the simple accessibility that PayPal offers to crypto-currencies.
With graphics and fairly solid logic, the firm explains that PayPal purchased freshly mined crypto. Currently, the rewards are 6.25 BTC per block. Since the launch of Bitcoin on PayPal, about 70% of this amount has been swallowed up by the payment platform.
So it’s not surprising that the price has gone up. Rather than diluting the market, the new Bitcoins are being blended at a much lower rate than usual. As other market forces may be consistent, this scarcity of Bitcoins, caused by PayPal, is a major factor in almost all historical highs.
70% + 40% = 110%
In a previous newsletter, Pantera stated that Square’s payment application was already purchasing about 40% of newly minted BTCs. Square, which is run by Twitter founder Jack Dorsey, was already enabling crypto transactions.
That said, with PayPal and its 300 million customers, Bitcoin’s accessibility has simply exploded. There were critics. For example, PayPal users don’t have their private keys. This puts the security of funds theoretically at risk, and who knows what PayPal is doing in the meantime with the crypto held on their wallets.
graph of volume of itbit exchange going up
Nevertheless, Paxos, which provides crypto services to PayPal, has seen a huge jump in its business. In fact, Pantera claims that between the Cash application and PayPal, the takeover of Bitcoin is taking place at a faster pace than the mining of new BTCs. This further increases its scarcity, and therefore its price.
According to Pantera, although many bullish factors are already known, BTC growth is showing no signs of slowing.