That can be read in the newsletter from Pantera Capital, a well-known asset manager in the market.
“Shortage of Bitcoin due to PayPal”
They report sharply increasing trade volume shortly after PayPal announced Buy Bitcoin. The company has over 300 million registered accounts. Each customer may purchase up to $ 20,000 per week of Bitcoin.
In comparison, there are an estimated 100 million active bitcoin users. With the arrival of PayPal, many new potential users are suddenly added who compete for the same coins.
Due to its license (BitLicense), they are required to purchase ‘physical’ Bitcoin on the global market for any Bitcoin offered.
According to Pantera’s analysis, PayPal is buying aggressively in the market, and the payment giant has bought 70% of new inventory since the third week of October.
They compete with Square, known from the Cash App, and asset manager Grayscale, known from the GBTC trust.
According to Pantera, PayPal and Square collectively purchase more than 100% of fresh bitcoin in the market. As is known, approximately 900 fresh bitcoins come onto the market per day, which is approximately 6,300 BTC per week.
The chart below shows the peaks in the daily volume of the largest and most liquid crypto currency on the market. The prognosis is that this trend will continue firmly (dotted line).
The general trend is that bigger guys are buying up a lot of fresh Bitcoin in the market. As a result, the stock for exchanges such as Coinbase and Binance, also buyers of Bitcoin at miners, is drying up.
However, due to positive media reports, the demand for Bitcoin is increasing. This includes retail investors, who do rely on stock exchanges or investment apps. That then drives up the spot price further.
Some say the big boys are not prepared for this shortage. There would be “institutional FOMO”, the feeling of missing the boat.
Will banks, insurance companies and pension funds still be in time for their impatient supporters?
#Bitcoin exchange liquidity is melting down.
Institutions aren’t prepared for scarcity like this. pic.twitter.com/bK0fLhGqzD
– Cole Garner (@ColeGarnerBTC) November 20, 2020
Bitcoin exchange rate
Fundamentally, the market is therefore healthy, also because traditional names such as BlackRock and JP Morgan no longer reject Bitcoin as an investment. They increasingly see Bitcoin as a means of payment, savings and speculation.
In addition: the behavior of the owner changes. She to have rather Bitcoin than devalued fiat money such as the euro or the dollar.
There is no third party who decides what happens with your money, you manage your equity as inflatiemunitie for the future. Hold on for dear life (HODL). That motto is increasingly permeating the growing crowd of Bitcoin owners.
Data shows coins are leaving exchanges. Even at $18k, with conviction long term, HODLers aren’t selling. This makes #Bitcoin unique. In bull cycles #Gold production doubles to meet demand.$ BTC can’t DOUBLE. In fact it HALVES.
Price must rise exponentially to compensate. 💯🔥🚀 pic.twitter.com/ZJfxkxDWbf
— Alex Saunders 🇦🇺👨🔬 (@AlexSaundersAU) November 21, 2020
Finally, let’s take a look at the Bitcoin (BTC) exchange rate, then this Saturday it was rejected hard at $ 19,000. Is a correction in the short term obvious?
If we zoom out, we see that the price has increased by more than 41% in the past month.
What do analysts say about the price in the short term? The Dutch analyst Bitcoin 𝕵ack anticipates a correction towards $ 16,000 in the near term.
— //Bitcoin 𝕵ack 🐐 (@BTC_JackSparrow) November 22, 2020
The usually well-informed statistician Willy Woo also anticipates a correction before a new all-time high is reached.
That’s also because some of the ‘sleeping hodlers’ sold their Bitcoin during the rally in November. No reason to panic because those dips were bought up immediately, but a signal that a free run above $ 20,000 needs a (healthy) correction first.
Post this now as while there’s so much FOMO and strong fundamentals being blasted out, there’s also signs of the market being overheated locally. I’d be very surprised if we break all-time-high on the first try without a rejection, or consolidation, before a second run at it.
– Willy Woo (@woonomic) November 21, 2020
The price in euros:
Disclaimer: Bitcoin Magazine NL does not offer financial advice. The articles are intended for educational purposes.