[ad_1]
The price of bitcoin hasn’t been that high in about two years, and bullish investors in the world’s most popular cryptocurrency are seeing new reasons to cheer on the asset.
The recent rally for the progenitor of the cryptocurrency craze comes as PayPal Holdings Inc. PYPL,
Wednesday announced plans to accept the cryptocurrency and allow it to be used for merchant payments.
PayPal said that users on its platform will be able to buy bitcoin BTCUSD,
as well as other sister cryptocurrencies such as Ethereum ETHUSD,
bitcoin Cash BCHUSD,
and Litecoin LTCUSD,
That news helped push bitcoin’s value to just under $ 13,000, marking its highest level since around January 2018, when the appetite for blockchain-backed currencies was just at its peak.
PayPal’s move to cryptocurrencies comes about three years after Square Inc. SQ, founded by Jack Dorsey,
said it would accept bitcoin transfers for a select number of Square Cash platform customers. PayPal’s announcement is being hailed as a sign of wider adoption of the alternative to fiat currencies such as the US dollar DXY,
and euro EURUSD,
Square’s bitcoin business exploded last spring during the coronavirus pandemic, with the payments company enjoying a 600% increase in bitcoin revenue, to $ 875 million, led by new active bitcoin customers and the increased demand for cryptocurrency. Square reports results in about two weeks on November 5th.
PayPal’s announcement is further acknowledgment of the legitimacy of digital currencies, crypto enthusiasts say.
“The news really didn’t come as a surprise to the industry,” given Square’s increased revenue, wrote Danny Scott, co-founder and CEO of CoinCorner, a UK-based bitcoin exchange, in email comments. .
“With PayPal’s 346 million users and 26 million merchants, this development brings digital assets to mainstream audiences in a more meaningful way than anything we’ve seen this year,” wrote Charles Hayter, founder and CEO of CryptoCompare, which provides cryptocurrency data and analytics.
But PayPal’s report isn’t the only reason digital currencies are gaining more luster, after the bitcoin price staged a dramatic drop from a December 2017 peak to around $ 20,000 a bitcoin.
Earlier in the week, Federal Reserve Chairman Jerome Powell approved the digital currency, saying there could be benefits to a digital version of the US dollar, speaking at a virtual event hosted by the International Monetary Fund. The Fed was part of a series of banks that jointly released a blueprint for the future of digital currencies a few weeks ago.
Powell, however, said the challenges of creating a digital dollar include the threat of cyberattacks, the implementation of monetary policy, and the prevention of illegal activity.
“We have not decided to issue a [central bank digital currency] and we think there is a lot of work to be done … before making a decision like that, “Powell said.
The People’s Bank of China is at the forefront of using digital currency, pushing to make the yuan CNYUSD,
more than a global currency. The world’s second largest economy launched a trial of a digital currency last week, according to reports.
The Fed chairman sees the digital dollar as a complement to the physical currency rather than a replacement.
It is important to note that since such central bank currencies would be centralized and controlled by a government, traditional cryptocurrency investors do not view those currency units as being analogous or competing with bitcoin.
bitcoin, born in 2009 as a decentralized platform, was created by Satoshi Nakamoto, the person or persons who wrote the software code for the digital currency in 2009. bitcoin is backed by the blockchain network, which is the digital ledger technology that makes bitcoin and other decentralized and anonymous payment platforms.
It is certainly no coincidence that bitcoin originated in the aftermath of the 2008 financial crisis, when there is concern that the monetary stimulus employed by global central banks to stabilize the financial system would quickly erode the value of local currencies.
The public health crisis created by the coronavirus pandemic is creating another similar environment that should be prosperous for digital currencies, the bitcoin bulls argue.
“The dizzying speed of digitizing economies and every aspect of our lives, including financial lives, shows that there will be a growing demand for digital, global and borderless money that is intrinsic to bitcoin,” wrote Nigel Green, chief executive. by deVere Group, a champion of cryptocurrencies, in a research note.
“There is a growing feeling that we are ready to experience a similar miniboom as of late 2017,” he wrote.
That said, bitcoin and cryptocurrencies still have their critics and are still struggling with one of its biggest problems, investor safety.
Malta-based cryptocurrency exchange OKEx, one of the largest platforms in the industry, was forced to temporarily suspend withdrawals due to being “out of touch” with one of its key holders.
Others view cryptocurrencies as inherently worthless, with Berkshire Hathaway’s Warren Buffett once referring to bitcoin as “rat poison”.
However, some proponents see bitcoin as a legitimate competitor to safe haven assets like gold if not dollars.
bitcoin BTC.1,
has risen nearly 78% so far this year, as measured by CME Group futures. Futures on gold GOLD,
meanwhile, they are up a relatively pawn 27% to around $ 1,928, according to data from FactSet which tracks the most active contract.
Meanwhile, the S&P 500 SPX Index,
has risen 7% so far in 2020 and the DJIA Dow Jones Industrial Average,
was 0.7%.
.[ad_2]Source link
