PayPal and Square’s Cash App have bought up 100% of newly mined bitcoins, report says
After PayPal announced it would allow its users to buy, sell, and hold the digital token, about 300 million active users got instant access to digital currencies.
The US payments firm's crypto-exchange platform, itBit, was recording only moderate volumes until PayPal's announcement.
Bitcoin Cash News Team
The steady rise of cryptocurrency prices during the second half of 2020 has continued, and some would say have accelerated, in the face of continued political and economic uncertainty the world over. While this is certainly good news for crypto investors and those that continue to believe in the long term bullish case for crypto, it is also worth noting that these price increases may have unintended consequences.
PayPal and Jack Dorsey’s Cash App have bought 100% of newly mined bitcoins as the digital token is seeing a record rally this year, according to Pantera Capital’s monthly blockchain newsletter.
After PayPal announced it would allow its users to buy, sell, and hold the digital token, about 300 million active users got instant access to digital currencies.
The US payments firm’s crypto-exchange platform, itBit, was recording only moderate volumes until PayPal’s announcement.
But once PayPal’s service went live, itBit’s volumes started exploding within four weeks. PayPal is already buying 70% of the newly mined bitcoins while Cash App has bought about 40%, Pantera said.
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The graphic above shows a dotted white line, representing the total supply of newly mined bitcoins and original itBit volume. If PayPal’s growth persists, it would be buying more than the new coin supply issued recently, the report said.
The report also argued that Bitcoin’s current rally is more sustainable than that of 2017, which was driven by speculation. One of the chief drivers behind this surge in price is the ease of investing in Bitcoin through platforms like PayPal, Cash App, and Robinhood.
“When other, larger financial institutions follow their lead, the supply scarcity will become even more imbalanced,” the crypto hedge fund said. “The only way supply and demand equilibrates is at a higher price.”
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