Every week, another institution appears to jump aboard the crypto train. This week, it is PayPal. On Wednesday, PayPal officially confirmed it is entering the cryptocurrency market, enabling its customers to buy, sell, and hold cryptocurrency directly from their PayPal account — a feature that will be live within the next few weeks. The payment giant obtained a conditional New York BitLcense permitting them, in partnership with Paxos Trust Company, to offer these features. This move has been long anticipated by crypto enthusiasts, who see an endorsement from PayPal and its sprawling digital wallet network as means to catapult cryptocurrencies into mainstream use. The company has 346 million active accounts around the world, and pledged to make cryptocurrency “a funding source for purchases at its 26 million merchants around the globe.” The service will initially support Bitcoin (BTC), Bitcoin Cash (BCH), Ether (ETH) and Litecoin (LTC). Once a user buys the coins, they will stay in the user’s account until they are sold — the service will not allow cryptocurrencies to be withdrawn or deposited. Following the announcement, Bitcoin prices rallied 10% and broke $13,000, a new 12-month high. Since the announcement, PayPal is rumoured to be in talks to buy crypto firms, including BitGo.
CME Group has become the second-biggest Bitcoin futures platform based on number of open contracts, which is a good indication of the increased participation of institutions. At the start of the year, CME was 4% of the global open interest, and today they account for 15.8% of the open interest. According to Matthew Bibb, Co-Founder and COO of Stack Funds told CoinDesk: “The CME’s rise is predominantly let by institutional participation, as most entrants from that segment are prohibited from dealing in unregulated derivatives listed on retail platforms such as BitMEX and Binance.”
Institutional interest in cryptocurrency is clearly growing, and mainstream adoption seems to be coming fast. In response to PayPal’s announcement, Galaxy Digital CEO and multi-millionaire Mike Novogratz called the announcement “the short heard around the world on Wall Street.”
Key Crypto Headlines
“Crypto fund manager Grayscale Investments has increased its assets under management by $1 billion in the space of a week.”
“Crypto just got a shot at going mainstream in 2021.”
“PayPal is exploring purchase of cryptocurrency companies including Bitcoin custodian BitGo, Bloomberg reported, citing people familiar with the matter.”
“Bitcoin is one the move again. Prices just above $13,000, it us up 80% on the year, which is outpacing the year-to-date returns from leading equity performers in the S&P 500, including most of the infamous FAANG members. In fact, it has recently surpassed mighty Amazon.”
“The Ethereum network is processing more than double the transaction volume of Bitcoin and is on-course to process $1 trillion this year.
“Ripple, the $10 billion financial technology company best known for cryptocurrency XRP, is considering relocating its headquarters overseas due to frustration with the U.S. regulatory environment.”