PayPal’s Scale Drives Crypto’s Utility
In spurring new consumer behavior, scale matters. That’s especially true with cryptocurrencies, where making the leap from speculation to actual transactions (you know, the kind tied to goods and services) may be more marathon than sprint.
After all, merchants have to be willing to accept bitcoin (and other digital coins); payment providers have to be on board to help those merchants with acceptance and conversion into fiat (on the merchant side of the payment) as payments are settled. For the consumers themselves, fostering crypto use within a payments/checkout flow that is already a familiar (at this point, almost intuitive) one can be a tailwind, too.
The news Tuesday (March 30) that PayPal will enable U.S. consumers to checkout and pay at millions of merchants can be construed as the next stage in a process that began late last year.
As reported, those users can opt to use their digital wallets to pay with bitcoin, bitcoin cash or Litecoin for goods and services at checkout.
Through the service, known as Checkout with Crypto, holders will convert their cryptos into fiat in order to complete transactions, and PayPal has said the availability will stretch across all of its 29 million merchants, globally, over the next several months.
PayPal has said no fees will be levied as consumers opt to use crypto at checkout (noting instead that a “cryptocurrency conversion spread will be built into the conversion from crypto to USD” or to other currencies at the standard conversion rates set by the company), and has stated that only one crypto can be used per purchase.
Boosting The Range Of Payment Choices
In its release Tuesday, PayPal detailed some of the mechanics of Checkout with Crypto: At checkout, if a customer has sufficient balance of cryptocurrency to cover a transaction, crypto will automatically display as a payment method for that purchase (alongside other payment choices). Upon choosing the crypto they want to use to make the transaction, the crypto is converted into fiat by PayPal; the customer gets a record of the crypto sale itself, in addition to a record of the purchased item.
Story continues
PayPal said in its release that the checkout feature offers “enhanced utility” for crypto holders.
And it is utility that seems to be the operative word here. To get that utility, scale is critical.
PayPal had already fired a shot across the proverbial crypto bow late last year, when the payments giant said that it would enable consumers to buy and sell (through partnership with Paxos Trust) the cryptos across their accounts.
As to the scale: PayPal has said, per its latest earnings report, that it had 377 million active accounts, and 29 million merchants in place. By serving up cryptos along with other currency options, it might be the case that users can increase their familiarity and comfort level in using cryptos as part of everyday commerce. But there’s a kicker here too: PayPal holders have to load the cryptos into their PayPal wallets first (as detailed in that October announcement), thus further cementing the PayPal ecosystem.
Read More On Cryptocurrency:
PayPal a-palooza for crypto markets as Bitcoin throws flash crash, but all is calm again - CityAM
Crypto at a glance
Bitcoin climbed again overnight, as the price continued to push past $59,000 and closer to another new all-time high.
A flash crash this morning, however, has seen the leading cryptocurrency fall back to $58,000, though it remains up over the last 24 hours and the upward momentum already looks to be back on track.
The latest price charge comes on the back of news that PayPal is to start allowing consumers in the US to spend a range of currencies at online merchants, including Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH) and Litecoin (LTC). The initiative will allow consumers to make purchases with over 29 million online merchants worldwide around the world.
PayPal’s move is just the latest in a stream of major announcements that have moved cryptocurrency closer to mainstream acceptance this quarter.
Bitcoin is now looking to end Q1 of 2021 with its biggest Q1 gain for eight years. It’s up more than 100 per cent at time of writing, outperforming the second-best performing asset, oil, which is up 26 per cent. Bitcoin is now up more than 1,000 per cent from the March 2020 lows.
It was a strong performance generally yesterday in the cryptocurrency markets, with Ethereum (ETH) also buoyed by PayPal’s announcement. The second-largest cryptocurrency by market cap continues to push above $1,800, though is still yet to seriously threaten the psychologically all-important $2,000 level it broke last month.
Binance Coin (BNB) had a particularly good showing and is up almost 7 per cent, while Filecoin (FIL) was also up almost 20 per cent, continuing the recent streak of gains that followed institutional crypto investment giant Grayscale’s decision to launch a Filecoin trust.
All this means that the total market cap of crypto is approaching $2 trillion again. How long before we break that level?
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In the markets
The Bitcoin economy
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Total crypto market cap
The total capitalisation of the entire cryptocurrency market at time of writing is $1,878,404,221,948 yesterday, up from $1,841,128,747,142 yesterday.
What Bitcoin did yesterday
We closed yesterday, March 30 2021, at a price of $58,917.69 – up from $57,750.20 the day before. It’s now 24 days in a row that the price has closed above $50,000.
The daily high yesterday was $59,447.22 and the daily low was $57,251.55.
This time last year, the price of Bitcoin closed the day at $6,429.84. In 2019, it closed at $4,106.66.
Bitcoin market capitalisation
Bitcoin’s market capitalisation is $1.109 trillion at time of writing, up from $1.088 trillion yesterday. To put that into context, the market cap of gold is $10.807 trillion and Alphabet (Google) is $1.382 trillion.
Bitcoin volume
The total spot trading volume reported by all exchanges over the last 24 hours was $54,806,573,428 according to CoinMarketCap, down from $59,100,973,394 yesterday. High volumes can indicate that a significant price movement has stronger support and is more likely to be sustained.
Volatility
The price volatility of Bitcoin over the last 30 days is 55.31%.
Fear and Greed Index
Market sentiment is back in Extreme Greed again at 76.
Bitcoin’s market dominance
Bitcoin’s market dominance today is 60.92. Its lowest ever recorded dominance was 37.09 on January 8 2018.
Relative Strength Index (RSI)
The daily RSI is currently 61.64. Values of 70 or above indicate that an asset is becoming overbought and may be primed for a trend reversal or experience a correction in price – an RSI reading of 30 or below indicates an oversold or undervalued condition.
Convince your Nan: Soundbite of the day
“This is the first time you can seamlessly use cryptocurrencies in the same way as a credit card or a debit card inside your PayPal wallet. “We think it is a transitional point where cryptocurrencies move from being predominantly an asset class that you buy, hold and or sell to now becoming a legitimate funding source to make transactions in the real world at millions of merchants” PayPal head Dan Schulman, speaking yesterday
What they said yesterday
The bull run takes a spicy turn…
Bitcoin is up a $1000 since this tweet…
Listen, I know I was wrong about #Bitcoin. And I love the #BTC people. I wish I was in. But I need a price I can stomach to get back in #DDTG @Blockfolio pic.twitter.com/k7Fo6M7ecs — Dave Portnoy (@stoolpresidente) March 30, 2021
Woah…
Good thread…
The time has come
We have finally added bitcoin to our markets section, replacing the price of gold
here is why we made the switch pic.twitter.com/RWWUzEmzOv — Morning Brew ☕️ (@MorningBrew) March 30, 2021
Crypto AM Editor writes
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Bitcoin falters as $60,000 starts to feel like a distant memory
Crypto AM: Longer Reads
City AM Markets: What is Decentralised Finance (DeFi) by Aave
Crypto AM: Conversation with James Bowater
Crypto AM: Market View in association with Ziglu
Crypto AM: Technically Speaking in association with Zumo
Crypto AM: A Trader’s View with TMG
Crypto AM: Mixing in the Metaverse with Dr Chris Kacher
Crypto AM: Talking Legal
Crypto AM: Spotlight
Crypto AM: Founders Series
Crypto AM: Industry Voices
Crypto AM: Tiptoe through the Crypto with Monty Munford
Crypto AM: Definitively DeFi
Crypto AM Parliamentary Special Five Part Series
March 2021
Day Five
Day Four
Day Three
Day Two
Day One
Crypto AM: Recommended Events
CC Forum
Global Investment in Sustainable Development
March 31 to April 1 2021 – Dubai
Global Technology Governance Summit
April 6 to 7 2021 – Tokyo
https://www.weforum.org/events/global-technology-governance-summit-2021
Cautionary Notes
It’s definitely tempting to get swept up in the excitement, but please heed these words of caution: Do your own research, only invest what you can afford, and make good decisions. The indicators contained in this article will hopefully help in this. Remember though, the content of this article is for information purposes only and is not investment advice or any form of recommendation or invitation. City AM, Crypto AM and Luno always advise you to obtain your own independent financial advice before investing or trading in cryptocurrency.
All information is correct as of 08:30am GMT.
bitcoin: Moving beyond Bitcoin to the next crypto revolution in 2021
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DeFi
As the name suggests, Decentralised Finance (Defi) is a diverse group of financial applications founded on cryptocurrency or blockchain technology. As an open financial system, Defi aims to improve financial transactions' speed and efficiency by eliminating the middlemen and delays due to a centralised system. Defi offers its users direct control over their money. It is being used in various fields like banking, insurance etc., across the globe.
NFT
Non Fungible Tokens are digital assets with a presence only on the internet. They represent various tangible and intangible assets such as art, paintings, sports cards, music data, virtual real estate etc. Each NFT contains unique information which helps users distinguish between different NFT’s. The data also allows us to verify the authenticity of the assets. Since each NFT is special on its own, they are non-exchangeable.
Polka Dot
Polka Dot connects multiple specialised blockchains into a unified network. It is also known as the next-generation blockchain technology. In general, a blockchain can process only a limited number of transactions at a given time. But Polka Dot could process multiple transactions on multiple chains parallelly. Bringing several blockchain networks together into a scalable network enables blockchain to reach its full potential for practical applications.
Yield Farming
It forms part of the Defi network and allows users to earn cryptocurrency using cryptocurrency. Its process is similar to lending money to your peers and earning interest over the loaned amount. Yield farming requires its users to lock in their crypto assets for a specified period in return for rewards. Rewards could be earned in the form of interest, new tokens, other crypto coins etc. The fundamental advantage of yield farming is the lucrative profit-making opportunity involved.
The dramatic rise in Bitcoin value has put cryptocurrency on the map in the investment space. Since its inception - not over a decade ago, Bitcoin has surpassed great heights in terms of value. It is the biggest cryptocurrency with a $1 trillion economy. While Bitcoin is the largest cryptocurrency, there are over 5000+ cryptocurrencies currently in circulation, many of which are listed on the CoinSwitch Kuber app. However, most people are unaware of these currencies.Several digital currencies have posted gaudier returns than Bitcoin. Ethereum - the second-largest cryptocurrency, has risen by 750% since 2020, besting Bitcoin’s 600% returns during the same period. Many such cryptocurrencies are now sharing the spotlight alongside bitcoin. Investors are starting to wonder, ‘What is the next crypto revolution in 2021?‘Cryptocurrencies are the newest class of assets introduced into the investment landscape. Although it was initially designed as a decentralised alternative to the traditional and centralised financial system, it has also evolved to become a store of value.While there was some older form of digital currencies since the 1980s, people recognised cryptocurrencies through the lens of Bitcoin. Bitcoin was published as a whitepaper by an anonymous person/organisation under Satoshi Nakamoto’s pseudonym in 2009. Its concept quickly rose in popularity and gained attention on a global scale.Eventually, many Bitcoin-like currencies collectively known as altcoins mushroomed in the crypto market. While not all of those currencies bear high utility, many of them have proven to be an improvement over Bitcoin itself. Here’s a list of the most popular coins currently in circulation.Bitcoin has now clearly established itself as a valuable asset. Investors are increasingly on the lookout for something more significant than Bitcoin. While it is common to consider the value and market trends to guess which is the next big crypto, price is not the only aspect we need to focus on. Instead, investors need to look for functionality and supply of the digital currency. If a cryptocurrency is useful, it will surpass any hindrance, survive and continue to grow.Another factor to look for is scarcity and supply. If a currency is not limited in supply, it may lose its value over time since reserve can be met with increasing demand and cause inflation. For example, Bitcoin gained popularity because it removes intermediaries from transactions and serves as a deflationary asset with a limited supply of only 21 million BTC in total.A cryptocurrency will have the highest chance of becoming the next crypto revolution if it has the following characteristics:The cryptocurrency market is a melting pot of groundbreaking innovations in technology. Many cryptocurrencies with high utility and functionality are being introduced from time to time. Here are a few trends that could revolutionise the crypto space in 2021.The cryptocurrency market is ever-changing. With cryptocurrency apps like Coinswitch Kuber making significant headway into easing crypto investment, there are innumerable opportunities for crypto investors in India to build a strong portfolio.However, before making a significant investment decision, investors should keep in mind to question the functionality of the currency. If a cryptocurrency is functional enough, it will continue to thrive.This above is non-editorial content, and TIL hereby disclaims any and all warranties, express or implied, relating to the same. TIL does not guarantee, vouch for or necessarily endorse any of the above content, nor is responsible for them in any manner whatsoever. The article does not constitute investment advice. Please take all steps necessary to ascertain that any information and content provided is correct, updated and verified.