PayPal announced last month that the company now cryptocurrencies as bitcoin (BTC) in ethereum (ETH) sells. Entering the market through this online payment system is already having a major impact on bitcoin’s price, Pantera Capital, a crypto asset manager, said in a new report Nov. 20:
NOW AVAILABLE: Our November #Blockchain Letter
• The U.S. Election
• #Bitcoin Shortage
• Pantera Fund Performance
• Bitcoin Price Deviation From Ten-Year Trend
• Stan Druckenmiller & Bill Miller Buy Bitcoin
• Asymmetric Opportunityhttps://t.co/huCb2u59H0
– Pantera Capital (@PanteraCapital) November 20, 2020
In the report, Pantera reports that there is a shortage of bitcoin. Indeed, PayPal would be nearly 70% of all new geminede buy bitcoin. The company reports this based on data from itBit:
When PayPal went live, the volume started to explode. The increase in itBit volume means that within four weeks of going live, PayPal will already buy almost 70% of the new supply of bitcoins.
The remaining 30 to 40% would be bought by Square’s Cash App, Twitter CEO Jack Dorsey’s payment system. Dan Morehead, Pantera CEO, says:
PayPal+CashApp already buying more than 100% of all newly-issued bitcoins. PayPal alone likely buying all within weeks.
Where would Cash App get theirs? That’s where the finite-supply, inelasticity part comes in: At a higher price.#bitcoinshortage
– Dan Morehead (@dan_pantera) November 20, 2020
PayPal and Cash App already buy more than 100% of all newly issued bitcoins. Only PayPal will probably buy everything in a few weeks.
Where does Cash App get theirs from? That’s where the finite supply and inelasticity come into play: at a higher price.
Morehead is referring to the maximum supply of bitcoin; no more than 21 million BTC tokens will ever appear in the world. The third was in May this year halving of bitcoin. Since then, the influx of new tokens to the market has halved, making the supply even tighter.
As more and more people, including large listed companies, enter the market and hold their bitcoin longer, the available supply on the market is shrinking. More and more analysts report that this is the reason behind bitcoin’s recent price increase.
Cash App has been selling bitcoin for some time, but invested in early October another $ 50 million in the cryptocurrency. PayPal recently announced that are crypto services now available to all US customers.