Bitcoin More Expensive Than Gold, After PayPal Plans To Support Cryptocurrencies

21/10/2020

In a sudden but predicted move, the price of Bitcoin has spiked to as much as 8%, pushing its trading price to $13,000, the highest point since July 2019.

The leap follows PayPal's announcement, saying that the financial-services giant would open its services to cryptocurrency purchases and sales.

PayPal said it would allow its users to buy, hold, and sell cryptocurrencies from their accounts starting in a few weeks. They can even use the platform to accept cryptocurrencies as a funding source.

The cryptocurrencies PayPal plans to support, include: BTC, Ethereum, Litecoin, and Bitcoin Cash.

PayPal said it planned to expand the features to its Venmo app and international markets through the first half of 2021.

Related: "Buy Bitcoin" Surpasses "Buy Gold" On Online Search Phrase

Bitcoin becomes the best performing of the three “commodities” over the past year.
Bitcoin becomes the best performing of the three “commodities” over the past year. (Credit: Hard Fork)

PayPal wrote that:

Beginning in early 2021, PayPal customers will be able to use their cryptocurrency holdings as a funding source to pay at PayPal's 26 million merchants around the globe.

Consumers will be able to instantly convert their selected cryptocurrency balance to fiat currency, with certainty of value and no incremental fees.

PayPal merchants will have no additional integrations or fees, as all transactions will be settled with fiat currency at their current PayPal rates. In effect, cryptocurrency simply becomes another funding source inside the PayPal digital wallet, adding enhanced utility to cryptocurrency holders, while addressing previous concerns surrounding volatility, cost and speed of cryptocurrency-based transactions.

In addition to providing these significant cryptocurrency services, PayPal has been exploring the potential of digital currencies through partnerships with licensed and regulated cryptocurrency platforms and with central banks around the world.

For the past five years, PayPal has increased its focus and resources on exploring the next generation of digital financial services infrastructure and enhancements to digital commerce through an internal blockchain-focused research team.

In 2019, PayPal Ventures, the company's venture capital arm, invested in TRM Labs, a company focused on helping financial institutions prevent cryptocurrency fraud and financial crime, and Cambridge Blockchain, a blockchain-based identity management and compliance software company.

PayPal will continue exploring the potential of distributed ledger technologies to improve financial services and assure they are faster, more secure and less expensive. The company intends to work hand-in-hand with regulators, governments and central banks in this quest.

While breaking $13,000 would be considered a big milestone among cryptocurrency insiders, this moment isn't actually the biggest rally for Bitcoin in recent history.

The popular cryptocurrency certainly broke its record this 2020, but it should be noted that the world's largest cryptocurrency is already up by more than 11% this week alone.

PayPal's plan to support cryptocurrencies only fueled the upswing.

In fact, according to Investing.com’s price data, the rise is only Bitcoin's 20th largest single day increase since October 2019.

But in this case, Bitcoin’s price peak is making it eclipse gold and silver, to become the best performing of the three “commodities” over the past year.

Other mainstream fintech companies have in the past adopted the previously ignored asset class. Square for example, bought 4,709 Bitcoins for $50 million earlier this October, saying that Bitcoin could become "a more ubiquitous currency" in the future.

Related: Gold Assets And Bitcoin Performed Almost Identically For About A Month