According to Pantera Capital, the Bitcoin shortage in the market is having a considerable effect on price. And the entry of PayPal into the cryptocurrency sector could also be considerably affecting the Bitcoin prices.
According to a report recently published, Pantera Capital, the crypto investment firm has expressed that Bitcoin’s supply crunch is the reason for the recent price rise and that most of the freshly produced Bitcoin is being taken by PayPal.
“PayPal seizing 70% of freshly issued Bitcoins”: Pantera
Pantera alleges that PayPal’s recently launched crypto service is “already having a huge impact”, adding further that PayPal is seizing an estimate of 70% from the fresh Bitcoins in circulation.
Quoting itBit data, Pantera alleges:
“When PayPal went live, volume started exploding. The increase in itBit volume implies that within four weeks of going live, PayPal is already buying almost 70% of the new supply of bitcoins.”
Pantera further claims according to their data, that Cash App and PayPal together are purchasing all the freshly circulated BTC.
BTC’s monetary policy is programmed to deflate gradually with time. Through a large-scale adoption, it results in greater purchasing capacity and supply shortage. Pantera alleges that the latter is helping in BTC’s symbolic rise.
Paypal introduced its crypto trading facilities in the U.S.A. recently, permitting traders to trade up to $20,000 weekly. The platform will be launched worldwide at the beginning of 2021.
PayPal has 300 active customers, which makes its entrance into digital currency a major advancement for adoption.
According to Pantera, it has become a lot easier to buy BTC today than in the previous bull market in 2017. After PayPal, retail adopts Bitcoin and other virtual currencies now, including Robinhood and Cash App.
Large-scale adoption means the virtual currency is more probable to be consistent on higher prices. Though Bitcoin continues to be highly votalile, it had stayed stable for an unexpected long duration before surging over the last two months.