Monday 26 October 2020 12:17 pm

PayPal launches Crypto service as institutions keep betting on Bitcoin

This week CryptoCompare data shows the price of Bitcoin (BTC) moved up from around $11,480 to test the $13,000 numerous times on several positive developments for the cryptocurrency space. At press time, it’s at $13,070.

Ether (ETH), the second-largest cryptocurrency by market capitalization, moved from $375 at the beginning of the week to a $420 high before enduring a slight correction. It’s trading at $405 at press time.

Headlines this week were dominated by an announcement from PayPal Holdings revealing a new service that allows its customers to “buy, hold and sell cryptocurrency directly from their PayPal account.” In its announcement, the firm revealed PayPal plans to “significantly increase cryptocurrency’s utility by making it available as a funding source for purchases at its 26 million merchants worldwide.”

The new service will let PayPal users buy, sell, and hold Bitcoin, Bitcoin Cash, Ethereum, and Litecoin and will for now only be available in the United States. The company is planning to “expand the features to Venmo and select international markets in the first half of 2021.”

PayPal’s move came after fintech startup Mode Global Goldings PLC (“Mode”) announced it had become the first publicly listed company in the United Kingdom to adopt Bitcoin as a treasury reserve asset.

Mode was founded in 2019 and incorporated in August 2020 to “build a next-gen ecosystem that combines the best of banking, payments, investments, loyalty, and digital assets.” The exact value of its bitcoin holdings wasn’t revealed, although it “allocated up to ten percent of its cash reserves to purchase Bitcoin.”

Mode adopted BTC as a treasury reserve asset after business intelligence firm MicroStrategy acquired “a total of 38,250 bitcoins at an aggregate purchase price of $425 million” back in September, and after Jack Dorsey’s Square announced it “purchased $50 million in bitcoin” earlier this month.

Nikolaos Panigirtzoglou, a Managing Director at J.P. Morgan who works on Global Market Strategy, published this week a report on the long-term potential of BTC, detailing the cryptocurrency is competing with gold. These developments have seen the Crypto Fear & Greed Index, which is based on an analysis of “emotions and sentiments from different sources,” enter the “Extreme Greed” category.

As the price of bitcoin moved up to the $13,000 mark, 98% of Bitcoin’s unspent transaction outputs (UTXOs) are currently in a state of profit, a level that hasn’t been seen since December 2017, when the price of BTC was at an all-time high near $20,000. An unspent transaction output refers to the BTC remaining after a transaction was executed, similar to the change received after a cash transaction.

Crypto Asset Manager Sees $1.4 Billion Inflows in October

Cryptocurrency asset manager Grayscale Investments has seen its assets under management (AUM) swell by over $1.4 billion so far in October, bringing the total to over $7.3 billion, from $5.9 billion at the beginning of the month.

The inflows come after the firm posted a record quarter in which it raised a total of $1.05 billion, making it the “largest capital inflow in a single quarter in the firm’s history.” In its report, Grayscale detailed that in Q3 of this year institutional investors accounted for 81% of the inflows.

Canadian investment manager 3iQ has seen its public bitcoin fund, which is listed on the Toronto Stock Exchange, hit a new milestone after it surpassed the $100 million market cap. Called The Bitcoin Fund, it’s Canada’s first crypto fund listed on a major stock exchange and works as an exchange-traded product (ETP) as it gives investors exposure to its underlying asset.

Institutional investors aren’t the only ones interested in cryptoassets. The hackers that breached the security of Singapore-based exchange KuCoin have moved $1.25 million in ETH to a transaction mixer in a bid to hide their tracks from blockchain sleuths. The volume is so large they may make the work of law enforcement agencies easier by making up the majority of the funds in the mixer.

In an odd turn this week, those behind the Darkside ransomware group have donated some of the BTC they extorted to two charities: The Water Project and Children International. Both charities received 0.88 BTC (worth $10,000 at the time of the donation), but Children’s International quickly claimed they have “no intention of keeping” the donation if the funds are indeed stolen.

Crypto AM: Market View in association with Ziglu