The astounding thing about the world of cryptocurrencies is how fast things can move when there’s a catalyst for change. For Bitcoin, the world’s most famous cryptocurrency looked set to spend the final months of 2020 taking a back seat to the rapidly developing DeFi landscape. One PayPal announcement later and it’s closing in on its all-time high value.
The 2020 crypto gold rush was sparked into life on October 21st when payment giant PayPal announced that they would be accommodating cryptocurrencies like Bitcoin, Ethereum, Litecoin and Bitcoin Cash – allowing its network of 286 million users to buy and sell cryptocurrency. The coins could then be used to make purchases from the 26 million sellers that accept PayPal, the organization announced.
The notion of 286 million users suddenly gaining access to cryptocurrencies has prompted some enthusiasts and investors to believe that the world of crypto is on the precipice of arriving into mainstream usage.
As the chart above shows, in the 30 days that followed the PayPal announcement, the price of Bitcoin has climbed by an astonishing 53%. According to CoinGecko, Bitcoin’s all-time high value was clocked at $19,665.39 on the 16th December 2017. On Bitcoin’s current trajectory, the world’s most famous cryptocurrency could break new ground imminently – although analysts have warned that the coin’s rapid growth could come with a significant correction before it surpasses values of $20,000.
The Path to The Mainstream
Of course, not all of PayPal’s 286 million users will buy Bitcoin or any altcoins for that matter. But, the payment giant’s move towards offering crypto represents an unprecedented step towards mainstream acceptance of digital finance that was lacking during the highly speculative Bitcoin bull run of 2017.
Today, there are plenty of conditions that are ripe for a progression towards mainstream crypto adoption. The backing of PayPal has been compounded by the news that Square had added $50 million in Bitcoin to its corporate treasury, while the best crypto exchanges offer greater levels of usability and security to their 2017 predecessors.
One of the most significant reasons behind why Bitcoin could continue to push far beyond its 2017 high, however, is the emergence of a new investment market.
Just two years on from JPMorgan chief Jamie Dimon exclaiming that Bitcoin was a ‘fraud’, the investment banking giant is ramping up the optimism surrounding the future of the cryptocurrency: “Bitcoin could compete more intensely with gold as an ‘alternative’ currency over the coming years given that millennials will become over time a more important component of investors’ universe,” a JPMorgan spokesperson told CTV News.
While the market capitalisation of Bitcoin is 10 times lower than gold, the arrival of more investment opportunities and a wider, more technologically agile market of younger investors could contribute to closing that cap in the coming years.
Some commentators have noted that the adoption rates of cryptocurrencies somewhat mirror that of internet adoption as the World Wide Web began to take hold.
If this trend continues, and younger investors opt for crypto ahead of stocks and shares or gold, it’s little wonder why some key industry players are expecting the world’s most famous cryptocurrency to reach a value of $100,000 in twelve months.
Is Now The Time to Embrace The Gold Rush?
While it may not make much sense to suggest exercising caution following on from referencing a prediction that put a six-figure price tag on Bitcoin in a year from now, it’s vital to remember that cryptocurrencies are famously volatile and built heavily upon speculation.
As PayPal ramps up its services for users looking to buy into and hold Bitcoin, we may see more erratic behaviour on the market.
The meteoric 53% rise of Bitcoin towards its all-time high price has left commentators feeling as though the coin has built up ahead of steam, fuelling talk of a significant correction in the near future.
If such a correction occurs and the value of the coin drops to around $14,000 – this may represent a credible buy zone ahead of what could be a very bullish future for the cryptocurrency. But as PayPal has placed Bitcoin on the precipice of uncharted territory, all bets are off as to where the coin will eventually settle.
The arrival of PayPal could have a knock-on effect on a range of altcoins that aren’t even covered by the payment company. As PayPal opened its services up by dropping its waitlist on Bitcoin, decentralized finance tokens began a surge that seemed unlikely in recent months. Leading names in DeFi like yearn.finance and Uniswap began recovering significant value where they had been formerly written off by the market.
Bitcoin may still be the king of crypto in terms of market cap, but mainstream adoption can bring interest in a wide range of tokens that can boast plenty of practical benefits for users. There may be lots of fool’s gold still populating the crypto landscape, but there are also masses of cryptocurrency gold out there waiting to be picked up by the mainstream.
Read more at https://globalcoinreport.com/how-paypal-sparked-the-next-crypto-gold-rush/ […]