The price of Bitcoin is hitting new record highs. The recent entry of PayPal to the cryptocurrency market is probably behind the latest Bitcoin price rally.
The company introduced the new cryptocurrency feature to its US clients a few weeks ago. Afterwards, reportedly bought about 70% of the newly-mined BTCs, according to bitcoin.com. This impacted the token price which is currently at peak levels for this year.
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.Hedge fund manager Pantera Capital
ItBit is the fiat-to-crypto exchange, where PayPal runs its crypto service. The data in the report comes directly from ItBit.
The entry of PayPal to the crypto market also increased the demand for Bitcoin. The price of the token rose by more than $4,000 since PayPal announced its crypto service.
Other payment company, Square, has also made a large investment in BTC lately. According to Pantera’s report, PayPal and Square together bought more than 100% of all newly mined BTCs.
When other, larger financial institutions follow PayPal’s lead, the supply scarcity will become even more imbalanced. The only way supply and demand equilibrate is at a higher price.Pantera Capital
The Bitcoin price might also be affected by the current pandemic and the recent presidential elections in the US. However, big financial institutions have more potential to impact the numbers. It is anticipated that more financial companies will enter the cryptocurrency market as well.
The BTC price rally is also a matter of supply. Only 6.25 new BTCs are mined every 10 minutes. Every 4 years the supply will decrease until all 21 million BTC enter circulation. As it decreases, due to lower mining rewards, the demand and the price, naturally, will increase.