Cryptocurrency update: Bitcoin passes $50,000 in 3-month uptick

Bitcoin starts the week in fighting form as it reaches heights not seen since mid-May.

Crypto update

Bitcoin continues fightback after breaching $50,000

Bitcoin started the week strongly by building on weekend momentum to break above $50,000 for the first time in three months.

The world’s most popular cryptocurrency is currently trading at $50,345 and is up over 3.25% in a 24-hour period. According to Coindesk data, Bitcoin is now up 71.4% year-to-date.

A couple of new reports have helped push BTC towards new highs.

Firstly, Coinbase has announced it plans on adding a further $500 million worth of new crypto assets, including BTC, to its holdings. Institutional support tends to be a big support for Bitcoin. It’s no different here.

We’ve also seen PayPal announce it will offer crypto wallet services to UK customers. More on that later.

Price action remains above the 200-day moving average. That could mean we’re seeing a sustained rally, rather than a flash-in-the-pan trading moment. That said, trading volumes have remained relatively flat since the weekend, despite the uptick in price action.

Bitcoin is the crypto industry’s bellwether. With it back in the green, several other popular tokens are subsequently rallying. Cardano is up over 7%, XRP, is up over 3.75%, and Ether is showing a 2.31% rise.

Is Bitcoin back in business? We all know how quickly things can change in the world of digital finance and token trading. We’ll just have to wait and see, but the fundamentals suggest we could at least see the rally continue across the week.

PayPal offers crypto services to UK customers

As digital token trading gets more popular, an increasing number of platforms are starting to offer crypto buying, selling, and holding on their platforms.

The latest to throw its hat into the digital currency ring is PayPal. It is now offering crypto services to its UK customers. Users will be able to exchange or hold four cryptocurrencies: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.

Crypto derivatives, like CFDs, are banned for retail customers in the UK. However, retail clients can still buy and hold the physical coins themselves, circumventing this ban. That’s essentially what PayPal is offering here.

The same service was launched in the US fairly recently. Users there can also pay for transactions using their crypto holdings too.

For some, PayPal’s decision to accept digital currencies on its platform came as a bit of a shock. There have been questions around money laundering and potential fraud caused by cryptocurrency users’ anonymity. Such critics have thought maybe PayPal and other institutions may have been put off by this.

There’s also volatility to consider. While we’ve seen Bitcoin reach a new 3-month high this week, it fell away dramatically from its all-time highs in April to below $30,000 weeks later. This may have been seen as an impediment to adoption by the likes of PayPal in the past.

This is obviously not the case. PayPal is now happy to ride the crypto train until the wheels fall off.

Jose Fernandez da Ponte, vice president and general manager for blockchain, crypto and digital currencies at PayPal, said his company’s new service could help introduce more people to cryptocurrency.

“The pandemic has accelerated digital change and innovation across all aspects of our lives, including the digitisation of money and greater consumer adoption of digital financial services.

Global digital currency adoption soars over two years

The adoption of cryptocurrencies has grown 2,300% over the past two years Chainanalysis research has revealed.

Those stats represent the acceleration in crypto trading at the end of Q2 2021 against Q2 2019. Chainanalysis data also reveals it is up 881% across the last year.

The blockchain specialist said it rated activity in 154 countries against three criteria to establish its results:

  • The amount of on-chain crypto received
  • On-chain retail value transferred
  • Peer-to-peer (P2P) exchange trade volume

The above metrics were weighted by purchasing power parity (PPP) per capita. P2P exchange trade volume was weighted by the number of internet users in a given country.

Institutional support, i.e., that from banks, businesses, and brokers, is what drove adoption in North America, Western Europe, and East Asia.

According to Chainanalysis’ report, digital tokens have been seen as “compelling” by such players, particularly as prices were reaching all-time highs at the start of the second quarter.

On the other hand, peer-to-peer activity pushed growth in emerging markets. Crypto users and investors in these areas see digital currencies as a to preserve savings in the face of currency devaluations. They also can use it for overseas remittance or carry out business transactions.

“Central and Southern Asia, Latin America, and Africa send more web traffic to P2P platforms than regions whose countries tend to have larger economies, such as Western Europe and Eastern Asia,” the report states.

Cryptocurrency update: BTC leads fight back, Binance stocks tokens & PayPal predictions

In today’s look at crypto markets, we’re seeing some old familiars: market volatility and institutional support from one angle set against regulatory-headache inducing moves from another.

Cryptocurrency update

Bitcoin stages comeback after massive losses

What a week it’s been for Bitcoin. The bellwether crypto dropped considerably from record highs last week, falling to $47,655.

At the time of writing, however, BTC was staging a bit of a comeback. Starting on Sunday evening, Bitcoin has started changing hands for above $53,200, driven by Asian bulls.

Speculators are trading BTC with hopes of a decent correction. Last week’s price crumble was precipitated by a couple of big issues. One was Joe Biden flirting with the idea of raising US capital gains tax. Regulatory reform and straight up bans in some countries also caused a wobble, alongside frothy market conditions caused by the Coinbase IPO.

However, when prices dropped, investors may have seen that as a green light to buy. Many saw value in purchasing BTC at the $47-48,000 level. The fact buyers have apparently been quick to snap up tokens during the price lull may have helped cause the upswing we’re seeing today.

Global cryptocurrency markets are up 8% overall. Bitcoin’s rally has caused a jump in other tokens. ETH is up 10% and knocking on the door of all-time highs. Ripple is surging too, rising 11%. However, Dogecoin continues to slide. Dogecoin is basically run on the power of memes and internet culture, but it looks like even that power source is running out of steam. Dogecoin has dropped 5.7%.

One thing is clear: volatility looks like it’s here to stay in the Bitcoin and the wider cryptocurrency market.

PayPal CEO heralds massive crypto demand

Dan Schulman, PayPal CEO, has said demand for crypto tokens has far outstripped the payment platform’s expectations.

Speaking in an interview with TIME Magazine, Schulman suggested cash may be on the way out, with digital currencies ready to overtake traditional currency soon.

“Demand on the crypto side has been multiple-fold to what we initially expected,” Schulaman told TIME. “There’s a lot of excitement. We’ve been looking at digital forms of currency and DLT for six years or so. But I thought it was early, and I thought the cryptocurrency assets at the time were much more assets than they were currency.”

PayPal added a “Checkout with Crypto” service to its platform in March 2021. US-based consumers can now pay merchants via digital tokens using PayPal. It’s reckoned PayPal will begin rolling this service out to global audiences across 2021. Its subsidiary Venmo also started accepting crypto assets like BTC and ETH last week.

Schulman’s comments come in a year when institutional acceptance of cryptocurrencies is reaching new levels. Tesla snapped up billions of BTC; banks like Deutsche Bank and Goldman Sachs have stepped up their crypto offers; Visa allows settlement in digital currencies. This is a very small chunk of the institutions upping their crypto game.

But while demand is high, it’s worth reiterating that regulatory issues remain. As mentioned above, crypto trading is banned in some countries and others are clamping down too, or reshuffling regulations to be more restrictive. UK bank Natwest has also said it will not engage with customers who accept Bitcoin or other cryptocurrencies as payment, as part of its commitments against money laundering.

But the fact remains that interest in crypto trading is still exceptionally high worldwide, despite consternation from some angles.

Binance adds Microsoft, MicroStrategy & Apple stocks to exchange

China’s largest cryptocurrency exchange Binance has added more tokenised stocks to its exchange.

Users will be able to get exposure to Microsoft (MSFT), MicroStrategy (MSTR) and Apple (AAPL) tokens, paired against Binance’s own token Binance Coin.

Each of these tokens allows its owner to hold or trade fractionalized shares of the stocks they are associated with. The minimum trading amount is set at 100th of a token, equating to 100th of a stock. These are backed by a depository portfolio of underlying securities held by CM-Equity AG, Germany, according to Binance.

Coinbase and Tesla were the first two stock tokens available on Binance.

It’s an interesting move, but one that is open to regulatory scrutiny. Does Binance have the relevant license to start dealing equities to customers?  According to the Hong Kong Securities and Futures Commission (SFC), no.

Binance said it is “monitoring demand” and may add further tokens in the future.

Could this be the future of stock trading? Maybe. It will depend on how Binance’s stock offer performs.

PayPal, Bitcoin & the new crypto boom

Last week, Bitcoin reached highs not seen since July 2019. Why? PayPal made a momentous money decision to accept the leading crypto on its platform.

PayPal users can now:

  • Buy, hold, and sell cryptocurrency directly within the PayPal digital wallet
  • Spend crypto at any of the 26 million outlets on the PayPal platform

Initially, the cryptos on PayPal are the largest currently on the market: Bitcoin, Ethereum, Bitcoin Cash, and Litecoin.

Forbes has dubbed this move a “$50 billion stimulus check for Bitcoin”. It could prove a very popular move.

When the news hit last week, Bitcoin abruptly surged beyond $12,500 to hit highs of $13,200, subsequently reaching $13,370 over the weekend.

A Cornerstone Advisors/FICO survey of 3,000 US consumers showed cryptocurrencies are continuing to gain traction amongst PayPal users:

  • 60% of Smartphone users have the PayPal app installed on their device
  • 14% of PayPal users surveyed already have cryptocurrencies, and 53% of them have used Bitcoin to buy goods and services in the last two years
  • 15% of survey respondents plan to buy or invest in Bitcoin over the next 12 months

According to Cornerstone data, American shoppers bought retail products and services worth $31.2 bn using cryptocurrencies in 2019. 74%, or $23.1bn, came from PayPal users.

PayPal’s decision helps overcome two big barriers to mass crypto adoption.

Firstly, vendors have been resistant to cryptocurrencies. A company of this size and scale accepting digital currencies is a sign of retailer confidence. Secondly, it provides a platform where Bitcoin and others can be readily converted into currency for retail payments.

It should be noted that PayPal has not always been so open to crypto use on its platform. Former CEO Bill Harris once said in 2018 that Bitcoin was “The biggest scam ever”.

A change of CEO, however, means PayPal now sees where the wind is blowing and is grasping crypto tightly in its digital hands.

Other investment firms and global firms are moving to embrace cryptos too.

Square Inc., for instance, has put 1% of its total assets worth $50m into Bitcoin. Greyscale Investments has been even more ambitious, putting $1bn towards crypto products off the back of very high Q3 demand.

Another aspect that could power higher trading potential for crypto via PayPal’s decision is contactless payment.

In a world where retail is being buffeted by Covid-19, contactless payment, particularly QR-code driven methods, are becoming more desirable.

Currently, PayPal is developing QR-based payment solutions with 100 large US and European retailers. If it can crack it, then this will drive up payment accessibility.

It should be stressed, however, that cryptocurrencies are inherently volatile. Nothing is every particularly stable in the world of cryptos, so bullish prices could give way to bearish conditions.

Despite this, PayPal’s major moves could have fired the starting pistol on a new crypto boom.


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