According to Pantera Capital, one of the biggest funds in the crypto fund, the recent rally has been driven by the influx of retail investors buying Bitcoin. Per their projections, PayPal users alone may soon acquire more Bitcoin than there are being mined.
Paypal bought up to 70% of all the newly mined bitcoin since the payments giant started offering cryptocurrency services four weeks ago.
In a recent letter to investors, Pantera Capital Crypto Fund informed that PayPal has purchased the equivalent of almost 70% of all bitcoins mined in the last month. This month PayPal opened its crypto service to US customers. The company noted a high demand for cryptocurrency among users.
Pantera calculated the number of bitcoins on PayPal using data from the ItBit trading platform, which is owned by Paxos. “PayPal launched its crypto service in partnership with Paxos. Before integration with PayPal, the ItBit exchange, which is managed by Paxos, had a fairly constant trading volume — the white line on the chart below,” writes Pantera.
Since the launch of the PayPal crypto service, the volume on ItBit has increased dramatically: “The increase in volume on itBit means that within four weeks of the launch, PayPal is already buying almost 70% of the new Bitcoin supply”.
The dotted horizontal line on the chart represents the total amount of bitcoins mined. If growth continues, demand for PayPal alone will exceed the number of new bitcoins in a few weeks.
“When other, larger financial institutions follow their lead, the supply shortage will become even more unbalanced. The only way to balance supply and demand is through a higher price,” the analysts conclude.
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