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As COVID-19 reached the world, social distancing warrants and fears that banknotes could carry the virus popularized the concept of digital currency. Whether it’s corporations or central banks, all are mulling over the increased acceptance of cryptocurrencies.
Notably, bitcoin has grown around 80% this year as cryptocurrencies are attracting significant attention this year. Bitcoin recently broke the $ 12,000 mark and marked its highest level since July 2019 on October 21st.
Greater acceptance of companies
October 21st PayPal Holdings Inc (PYPL – Free Report) announced that it will allow customers to keep bitcoin and other virtual currencies in their online wallet and to shop using cryptocurrencies at the 26 million merchants on its network. The new service makes PayPal one of the largest US companies to provide consumers with access to cryptocurrencies.
This is great news for bitcoin and rival cryptocurrencies. Bitcoin was up about 7% on October 21 on PayPal news. PayPal competitor Square (SQ – Free report) launched bitcoin support in 2018 via its Cash app. Square also bought $ 50 million in bitcoin this month as part of a larger cryptocurrency investment.
However, PayPal is expanding the area by supporting bitcoin, Ethereum, Bitcoin Cash, and Litecoin. PayPal also plans to extend support to its Venmo subsidiary and international markets starting in the first half of 2021.
For now, the plan is only to support US users. Notably, US account holders will be able to buy, sell and hold cryptocurrencies in their PayPal wallets in the coming weeks, the company said, as quoted on Reuters. Other companies that accept bitcoins include Microsoft (MSFT – Free report), AT&T (T. – Free report), Dish Network (DISH) Burger King, Domino’s pizza (DPZ – Free report), Goldman Sachs (GS), Intuit Inc. (INTU), American online retailer Overstock, Shopify (SHOP), Virgin Galactic (SPCE), Zynga (ZNGA) and Etsy (ETSY) among others.
Dissemination of the concept of central bank digital currency (CBDC)
Several central banks have been considering launching CBDCs lately. China has taken serious steps towards contactless payments. In an effort to align with China, seven major central banks last week established key principles for issuing CBDCs, according to Reuters. China’s recent experimental giveaway of $ 1.5 million (1.16 million pounds) in digital yuan to the citizens of Shenzhen has received compliments from currency analysts.
Sweden’s central bank, Riksbank, is also conducting a pilot project with Accenture to prepare the electronic crown. The European Central Bank (ECB) is reflecting on the launch of a “digital euro” for the club of 19 currency nations. The ECB launched a public consultation on a potential digital euro on 12 October. In its 2020-2024 strategic plan, the Bank of Spain also said it will focus on design proposals for a central bank digital currency.
On October 19, Jerome Powell, chairman of the US Federal Reserve Board of Governors, said the Fed is committed to considering a CBDC but has not made any final appeal on it. The Fed wants to “do well than be first,” said Jerome Powell. “A series of experiments is underway at the board of governors here in Washington, DC,” Powell said.
How to invest in the recent rise of cryptocurrencies?
Investors can choose to invest in options such as blockchain ETFs. According to one source, “the Bitcoin blockchain works literally [as] a ledger; it keeps track of balances for all users and updates them as money changes hands. “” Invented to host bitcoins, today many other cryptocurrencies are also based on blockchain technology. “
So, since investors can’t get their hands on a digital currency ETF now, they can definitely familiarize themselves with the concept through blockchain ETFs such as Reality Shares Nasdaq NexGen Economy ETF (BLCN – Free report), Amplify the Transformational Data Sharing ETF (BLOK – Free report) e First Trust Indxx Innovative Transaction & Process ETF (LEGR – Free report).
Additionally, ETFs that offer exposure to the blockchain ecosystem via semiconductor companies that produce chips for mining bitcoins (or could create potential CBDCs) can be played. The most popular funds include iShares PHLX Semiconductor ETF (SOXX – Free report) is VanEck Vectors Semiconductor ETF (SMH – Free report).
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