According to the CEO of the crypto investment firm Pantera Capital, PayPal sparked a bitcoin supply crisis after it was first allowed its users to buy BTC.
In a new blog post, Dan Morehead says PayPal customers are already buying 70% of the new BTC offering that comes out on the market.
“PayPal’s crypto infrastructure provider is Paxos. Prior to PayPal’s integration of Crypto, itBit, the exchange operated by Paxos, had a fairly constant trading volume – the white line in the graph below.
When PayPal went live, the volume started to skyrocket. The increase in itBit volume implies that PayPal is already buying almost 70% of the new Bitcoin offering within four weeks of launch. “
When you combine those numbers with the fact that people are already buying BTC in large numbers through Square’s Cash app, Morehead says that 100% of all newly minted bitcoin is bought in the open market.
“Where would Cash App get your coins from? This is where the finite supply and inelasticity part comes into play: at a higher price. This is THE story in Bitcoin right now. “
Morehead points out that buying crypto on PayPal, Cash App, Robinhood, and other platforms is a major driver for the industry this year. This gives people the opportunity to invest and take selfies to prove their identity without long waits.
PayPal added support for Bitcoin, Ethereum (ETH), Bitcoin Cash (BCH) and Litecoin (LTC) for all US customers on November 12th.
Featured image: Shutterstock / HelloRF Zcool