Technology

Bitcoin price rises after PayPal and Coinbase announcements

PayPal has expanded its cryptocurrency buying and selling service in the UK. (Photo: 123RF)

The price of bitcoin rose above the US $ 50,000 threshold for the first time in three months on Monday, boosted in particular by positive announcements from online payments giant PayPal and the cryptocurrency shopping platform Coinbase.

At around 5:25 a.m. Quebec time, bitcoin’s price rose 4% on the session, to US $ 50,350, after hitting US $ 50,440 a few hours earlier, a high since mid-May.

The price “is driven by an announcement from PayPal”, which has extended its cryptocurrency buying and selling service in the UK, “a clear sign of growing demand,” said Timo Emden, an independent cryptocurrency analyst.

At the end of 2020, the launch of this service in the United States had given bitcoin a certain legitimacy, especially since it had been followed over the months by projects in the world of cryptocurrencies from players in traditional finance, such as banking. BNY Mellon or the BlackRock investment fund.

“And the announcement last week of Coinbase, which will invest US $ 500 million of its cash in cryptocurrencies, is part of the market enthusiasm,” added Neil Wilson, analyst at Markets.com.

The platform, listed on Wall Street, intends to continue by investing in the future 10% of its profits in digital currencies, she announced Friday.

Very volatile, bitcoin has gained nearly 70% in one month and 330% over one year, but it remains down 23% from its all-time high, reached in mid-April at US $ 64,870.

The very media multi-billionaire Elon Musk, boss of Tesla, then decided to refuse payments in bitcoin for his electric vehicles, contrary to a previous commitment, citing its environmental impact.

He pointed to the gigantic electricity consumption of bitcoin “mines”, these computer servers that constantly rotate around the world to operate this decentralized network.

Mr Musk has indicated that he will accept bitcoin payments again when the virtual currency is less polluting.

And other big players in tech and finance have confirmed their interest, such as Twitter boss Jack Dorsey.

But it is impossible to say whether the rise in prices will continue: “the new negotiation range could be between 40,000 and 50,000 US $”, estimates Rick Bensignor, of Bensignor Investment Strategies.

“For the cryptocurrency market, PayPal’s presence is positive,” admits Laith Khalaf, analyst at AJ Bell, but “the craze in cryptocurrency remains a matter of concern for consumer organizations and regulators.”

The French market regulator, the AMF, believes that “bitcoin is for sophisticated investors”, and its British equivalent, the FCA, warns that buyers “must be prepared to lose all their money”.

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