October started just as September ended, with Bitcoin pacing around the USD$10,500 region. But what a crazy 3 weeks it has been, with Bitcoin moving up towards $11,000 a week later, and just yesterday, piercing through $12,000 and straight up to $13,237 on the back of the announcement from PayPal that it will soon allow users to buy, sell and hold cryptocurrencies, as well as enable crypto payments. This will also trickle down to Venmo, PayPal’s P2P payment app.
It’s also interesting to note that this announcement is not limited to Bitcoin. PayPal will also allow purchases of Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH).
This is a huge announcement which signals a potential onslaught of retail demand, given that PayPal currently has 340M users worldwide. It also further cements the status of Bitcoin and other leading cryptocurrencies and sends a signal that they are definitely here to stay. Given this piece of news, it also makes sense to think that PayPal will have to convert some of their cash reserves to Bitcoin in the near future to facilitate payments and processing.
This follows a series of announcements from public listed companies starting to adopt bitcoin as a reserve treasury over Fiat currencies from August, with MicroStrategy leading the way by purchasing over $425M worth of Bitcoin from a $500M cash pile.
Square then followed up with a $50M BTC purchase, which is a small start, but I’m sure they will follow through with more buys in future. Square’s CEO Jack Dorsey is a well known Bitcoin proponent.
Two days ago, Mode, a UK listed fintech company announced that they will shift 10% of their cash reserves into Bitcoin. We also already know about Grayscale’s constant snapping up of available Bitcoin supply over the last 3 quarters.
Factors for Bitcoin’s rosy outlook for 2021
Growing Institutional Demand
Companies are snapping up bitcoin in the way that 2017 promised but never delivered. Today, the pipes are in place for big corporations to safely and securely procure bitcoin whilst keeping in line with regulations.
Whether buying through Grayscale Trust, or using a platform like Gemini to help procure and custody bitcoin, more and more avenues are opening up.
Accessibility for Retail Demand
Let’s face it. In 2013, buying Bitcoin was a hassle. Half the time you didn’t know what you were doing, and if you haven’t lost your private keys or gotten Mt Goxed by now, consider yourself lucky.
Today, buying crypto is as easy as downloading an app like Coinbase, Binance or Cryptodotcom, performing a quick KYC, and purchasing it by either using your credit card or bank transfer.
There are also physical Bitcoin ATMs around the world, if you’re the traditional kinda person and don’t mind paying hefty fees.
Post Halving Effect
With the halving in May, the daily new supply of Bitcoin has been effectively cut in half, with only 144 BTC mined per day. As more and more institutional players come into the fold, we’re seeing the effect of supply shrinking.
In fact, over the last quarter, more bitcoins were bought than were mined. We’re eating into existing circulating supply.
How do you feel about Bitcoin’s crazy move and all these bitcoin buying announcements coming in hard and fast?
Oh, and if you want to keep up with who’s buying bitcoin, Bitcoin Treasuries is a great resource.