Bitcoin touched $12,600 for the first time in 15 months on Wednesday as traders assessed the entry of PayPal into the cryptocurrency sector.
The $128 billion global payment firm announced a new service that would enable users to purchase, sell, and store Bitcoin from their existing PayPal accounts. It also signaled its intentions to make the cryptocurrency more spendable across its 26 million merchants worldwide by early 2021.
PayPal President and Chief Executive Dan Schulman said that their new Bitcoin services expect to encourage the global use of virtual currencies, especially as central banks plan to launch their fiat-backed digital tokens.
“We are working with central banks and thinking of all forms of digital currencies and how PayPal can play a role,” he SAID.
The Bitcoin Craze Begins
The announcement came amid an already-booming adoption of Bitcoin by significant corporates and asset management firms. Just last week, multinational payment company Square revealed that it is holding $50 million worth of BTC in reserves. Before that, a public-traded software firm MicroStrategy had bought $425 million worth of BTC in two rounds.
Today, UK-based Mode Global Holdings PLC (LSE: MODE) also allocated up to 10 percent of its cash reserves to purchase Bitcoin.
The firms’ Bitcoin buying spree prompted traders to increase their exposure. As a result, the BTC/USD exchange rate surged by more than 13 percent in the fourth quarter so far.
PayPal fueled the buying optimism further with its announcement on Wednesday. Shortly after the news made to the wire, BTC/USD stretched its Q4 profits to 18.43 percent while establishing a new year-to-date high at $12,669 as of 1421 UTC.
Analysts expect the profits to grow further into the quarter. Robert Sharratt, the managing director at investment management firm CrescoFin in Switzerland, called Bitcoin the “best-performing asset on Earth,” adding that its rate would keep growing in the future.
“Its secret sauce is something unique, which has eluded humanity for its entire history: a fixed supply of money,” he added. “Expect the outperformance to continue. Forever. Just based on supply and demand.”
More Integrations Ahead
Meanwhile, prominent crypto investor Vijay Boyapati focused on Bitcoin’s adoption as a financial asset into mainstream payments and trading platforms. He said the cryptocurrency would keep attracting corporate giants in the future as they take cues from the profits Square has earned after taking a similar decision before them.
“It did not escape PayPal‘s notice that Square was making a very large fraction of its profit allowing users to trade bitcoin. More and more financial institutions and payment processors will figure this out soon. The fiat on-ramps are getting bigger quickly.”