The news of Paypal entering the Bitcoin and cryptocurrency ecosystem pushed the price of the leading cryptocurrency to exceed $13.000 USD per unit, but traders suggest a correction will take the price of Bitcoin below this value.
Since June 2019, Bitcoin (BTC) did not see the $13.000 USD mark. In fact, its highest point so far in 2020 was $12.400 USD, while in June last year it exceeded $13.900 USD per unit, as shown in the following graph.
Source: CoinMarketCap
The boost that led Bitcoin to increase its value by almost 10%, compared to the price of the cryptocurrency at the beginning of the week, was the news that Paypal will integrate purchase-sale operations with cryptocurrencies, in its payment services, including Bitcoin. Thus, although this announcement was expected for several months, the confirmation Paypal caused a frenzy in the crypto space, leading BTC to grow by more than $1.000 USD in a few hours.
On the other hand, although Bitcoin reached $13.150 per unit, the level held slightly, and has been fluctuating between $12.850 and $13.000. The brief support of BTC at this level suggests to traders and market experts that a price correction is coming, so a pullback in the price of Bitcoin is possible, even though the medium-term sentiment of investors and the market remains positive.
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Different points of view
However, Paypal's decision and announcement is causing both positive and negative reactions within the crypto community. In any case, there is no doubt that the ecosystem is in a great debate about the implications of this integration. In its statement, the electronic payment giant announced that it will integrate the functions of buying and selling cryptocurrencies in its 26 million stores and shops that accept payments with Paypal. Meanwhile, it will launch its new services to US citizens, and will gradually expand to new countries, until reaching its 346 million users with active accounts on the platform.
While this is generally extremely positive news for the ecosystem, as it will allow the benefits of Bitcoin and cryptocurrencies to be exposed to a larger number of users, on the other hand, the way in which Paypal will allow buying and selling operations causes a lot of concern for users who defend freedom and decentralization.
In its announcement, Paypal indicates that users will only be able to buy, sell and store cryptocurrencies on the platform, and will not be able to transfer their digital assets to other wallets other than the one provided by the payment platform.
“PayPal merchants will have no additional integrations or fees, as all transactions will be settled in fiat currency at their current PayPal rates. In effect, cryptocurrency simply becomes another funding source within PayPal’s digital wallet, adding enhanced utility for cryptocurrency holders, while addressing previous concerns about the volatility, cost, and speed of cryptocurrency-based transactions.”
Bitcoin is no longer optional
With Paypal's announcement, the world's major banks will also begin to discuss how to support Bitcoin, a cryptocurrency that is no longer optional for these entities, as claimed Chamath Palihapitiya, president of Virgin Galactic, on his Twitter account.
Since the middle of this year, the OCC announced that US commercial banks could begin providing custody services for cryptocurrencies and stablecoins (stablecoins). In addition, large financial services and investment corporations, such as microstrategy, Grayscale y Square, are investing large sums in BTC, proving that this cryptocurrency has the potential to become a powerful currency in the near future. On the other hand, advisors of JP Morgan recently acknowledged that Bitcoin is an investment asset and store of value with a lot of potential, stating that institutional investments made, such as that of Square, are a vote of confidence in continuing the development of the cryptocurrency.
An early investment like in Apple or Google
Likewise, Paul Tudor Jones, a famous Wall Street investor and billionaire, stated that investing in Bitcoin is quite similar to investing early in Apple or Google shares. The expert assures that the cryptocurrency is an excellent option for hedging and protection against inflation, and that the value of this asset can increase exponentially in the near future, as its adoption progresses.
Thus, Paypal's recent announcement may help expose the cryptocurrency to the large masses of customers and users that this platform handles, which in turn may triple, or even more, the current Bitcoin user base. This expectation is favoring the price of Bitcoin, although until the $12.000 USD mark is converted into support, a price drop is not out of the question in the coming days.
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