Bitcoin is being bought massively by retail investors amid this strong rally higher, according to market data. Recent analysis showed that PayPal’s addition of BTC purchases could be a key factor behind its recent rally to $28,000.
Pantera Capital CEO Dan Morehead, that is a leading digital asset investor, with large positions in Bitcoin and many leading altcoins recently shared a chart to his Twitter. The chart shows the “addition” purchases of BTC via ItBit, which is PayPal’s cryptocurrency exchange partner for the retail integration. According to the analysis, there may be more Bitcoin purchased each day by PayPal users alone than there are being mined. As Morehead, a long-time macro investor, said to his followers:
“When @PayPal went live, volume started exploding. The increase in itBit volume implies that within two months of going live, PayPal is already buying more than 100% of the new supply of bitcoins.”
This analysis was a follow up to a report from Pantera that said Bitcoin’s demand trends are truly shifting in a promising direction. In that report, Morehead wrote:
“In the last seven months, we’ve had two huge shifts — one in demand, one in supply — both upwards. On the demand side, we’ve had public companies like PayPal enter the market. That shifts the demand curve much higher. At the same time, the supply of newly issued BTC was cut in half in May — as part of the every-four years Halving of bitcoin issuance. Fewer BTC are available. We titled our previous investor letter, Bitcoin Shortage. The price acts like there’s a shortage.”
Wall Street wants in on Bitcoin as well
Wall Street wants in on Bitcoin as well, which should help push BTC prices higher. A narrative has formed that BTC is a hedge against dollar inflation and a strong competitor to gold, which has made the crypto attractive to Wall Street in 2020.
Technology analyst Kevin Rookie recently stated that Grayscale’s Bitcoin Trust added 12,319 BTC in a single day earlier this month:
“Grayscale’s Bitcoin Trust just added 12,319 BTC to $GBTC in a single day. That’s more than the 11,512 BTC they added during all of last week, when Bitcoin broke its ATH.”
Most of Grayscale’s users are institutional investors looking for exposure to the digital asset space. Many think that Grayscale’s accumulation of Bitcoin and altcoins has been a key driving factor in the rally over the past year.
Bitcoin is likely to continue moving higher as these buyers continue to absorb the decreasing supply of BTC, experts say.