Bitcoin’s Making A Comeback

Bitcoin’s Making A Comeback

over 3 years ago2 mins

Mentioned in story

Shady's back: the price of bitcoin has bubbled up 25% in the past month to hit its highest since January 2018. But will newfound acceptance from PayPal bring investors in the OG cryptocurrency anything more than an air of respectability? 😎

What does this mean?

The last time bitcoin’s price sat above $13,000 was immediately following a holiday period in which the cryptocurrency briefly changed hands for $20,000 on some exchanges. And its current run caps another remarkable turnaround: bitcoin’s “safe haven” status was shaken when it tumbled alongside other investments in February to levels below $5,000.

Bitcoin's price just topped $13,000
Bitcoin’s price has crept back up (Source: CoinMarketCap)

Still, with the US dollar’s international clout in decline and inflation expectations expanding, “digital gold” – like its physical cousin – may be benefiting from investors’ search for even uncertain stores of value. And as both investments are denominated in dollars, the falling value of American currency may also boost prices by making them appear cheaper overseas.

The catalyst for bitcoin’s most recent breakout, however, came with the confirmation late Wednesday of longstanding suspicions that PayPal would shortly enable US customers to trade it and three other large cryptocurrencies, prior to rolling out global support for crypto-based payments next year… 😯

Why should I care?

PayPal’s no longer the sole big player in online payments processing, but its 26-million-strong network of merchants means it retains considerable cachet; it was notably the first partner to pull out of Facebook’s Libra plans for a quasi-cryptocurrency back in 2019. With several other recent high-profile failures accompanying a decline in the volume of bitcoin held on exchanges – despite rising prices – PayPal’s timing could be canny.

But there are broader trends supporting crypto too. Besides complaints over fees at the payments “duopoly” of Visa and Mastercard, fast-growing countries like Nigeria appear to be taking a keen interest in the sector – while the US, China and now the European Union are advancing schemes for their own digital currencies.

Visa and Mastercard debit card market share
Visa in particular also dominates the credit card market (Sources: Nilson Report, The Ascent)

Several public companies recently announced plans to put a bigger proportion of their “cash” piles into bitcoin – and Finimizers may be tempted to consider doing the same. Check out our Packs on cryptocurrency first, though – and just remember that the volatility of such bets mean they should only represent, if anything, a tiny part of your overall portfolio 🧐

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