The exchange house itBit, in alliance with Paxos, sells cryptocurrencies to PayPal.
If the trading volume holds up, PayPal’s influence could expand.
The exchange volume of bitcoin (BTC) for US dollars (USD) doubled at the itBit exchange in the last 60 days, following the entry of PayPal into the cryptocurrency markets.
Estimates from cryptocurrency markets consultancy CFBenchmarks indicate that purchase volume increased to 55.59 BTC per hour (1,334.16 BTC for each day, on average). Previously, 28.47 BTC per hour were traded in this same exchange house (itBit).
In the case of Ether, 250.42 ETH was traded on itBit; now they are marketed 770 ETH, equivalent to 4% of the volume of the exchange house compared to the previous period.
The USD / BTC exchange volume on the itBit exchange doubled in 60 days. Source: cfbenchmarks
The USD / ETH exchange volume on the itBit exchange tripled in 60 days. Source: cfbenchmarks
PayPal users have boosted the global market for Bitcoin and US dollars and the trend is expected to continue, said Sui Chung, CEO of consultancy CF Benchmarks.
Chung points to the positive performance of the BTC / USD pair in itBit, exchange house where Paxos acquires bitcoins for the benefit of PayPal, in a close commercial relationship.
To calculate the growth of this market, Chung explains that the previous 60 days of market activity and the 60 days after the launch of PayPal’s cryptocurrency service, on October 12, were compared.
“This volume is equivalent to 1.68 percent of the BTC / USD exchange market in all exchange houses,” he said, although this statement could not be verified.
When consulting the BTC / USD exchange volume according to the blockchain.com portal, it can be seen that since October a clear trend favorable to buying has formed, the highest of the whole year 2020, marking 323.5 million dollars.
While this data cannot confirm that PayPal covers 1.6% percent of the global volume of USD / BTC exchanges through itBit, yes it is clear an increase that coincides with the launch date of the service.
During the last season of the year, the USD / BTC exchange volume increased remarkably Source: blockchain.com
ItBit is an exchange house founded in 2013 and established between New York and Singapore, with an exchange volume of 1,494 BTC per day (28.9 million dollars), according to CoinMarketCap. In addition to being an exchange, it also offers over-the-counter services for partners such as Paxos, whose business requires buying large volumes of cryptocurrencies.
Chung notes that PayPal users are typically individuals or small businesses, so they are more likely to be making purchases for small amounts. This he mentions while Paxos has not yet seen the need to negotiate large amounts of Bitcoin over the counter to supply the demand for PayPal. However, the volumes can be considered high for the global market, in the opinion of the analyst.
Long-term institutional trend on Bitcoin
On a separate issue, although related, Chung considered that the tendency of institutions to buy cryptocurrencies would continue to drive the price of these.
The executive pointed out that the entry of PayPal may have maintained buying pressure on Bitcoin, keeping its price; Although it could be expected that users will also start selling and this will push the price of BTC back for a season.
However, he noted that many financial entities seek to correlate cryptocurrencies to the value of other assets, so the exchange with fiat will continue to be relevant.
“The way that traditional finance figures value Bitcoin is by relating it to other assets. This is mainly related to the limited supply, which other assets do not have.”
Sui Chung, CEO of the consulting firm CF Benchmarks.
Although for now PayPal only allows the purchase and sale of cryptocurrencies, but not the payment of services, Chung does not rule out that in the future users can manage their private keys as in a conventional cryptocurrency wallet.
The use of cryptocurrencies as a means of payment in PayPal has not been established, but the CEO of the company believes that PayPal will facilitate and promote this purpose, as we reported in CriptoNoticias.