A report by crypto investment firm Pantera Capital reveals that a Bitcoin shortage is the main cause of the recent increase in the price of the apex cryptocurrency. According to the report, PayPal has acquired most of the newly minted BTC.
PayPal’s appetite for Bitcoin is inspired by its new cryptocurrency service which opens up the gates to the cryptoverse for hundreds of millions of its users.
“When PayPal went live, volume started exploding. The increase in itBit volume implies that within four weeks of going live, PayPal is already buying almost 70% of the new supply of bitcoins.”
Bitcoin is programmed to be deflationary over time. More people are realising this and, in turn, acquire more cryptocurrency which leads to higher purchasing power and lower supply. Pantera suggests that this is a significant contributingfactor to BTC’s parabolic surge.
Pantera Capital forecasts,
“That is THE story in Bitcoin right now. When other, larger financial institutions follow their lead, the supply scarcity will become even more imbalanced. The only way supply and demand equilibrates is at a higher price.”
In an interview with Third Row Tesla Podcast, Elon Musk states that he sees crypto as a replacement for cash. However, the founder of PayPal does not see it being the primary database.
Elon is among a growing number of the 1% who have made public statements about the future of Bitcoin. Billionaire and Bitcoin proponent, Tim Draper asserts that Bitcoin (not banks or governments) will be the solution once the world bounces back from the coronavirus period. Another billionaire, Bill Pulte recently took to Twitter to donate money to different people in need, using the hashtag #PulteDropsBitcoin. In one of his posts on Twitter, he states that he is giving away real money for people to buy Bitcoin.