Bitcoin, the world’s largest digital coin, is soaring after PayPal announced it would allow customers to use cryptocurrencies.
Bitcoin hit its highest level since July 2019 after PayPal Holdings Inc. announced it would allow customers to use cryptocurrencies.
The largest digital coin rose 4.9% to $ 12,488 on Wednesday, surpassing the previous high of $ 12,473 set in August. The gains among so-called alt coins were even larger, with Litecoin surging over 11% and Bitcoin Cash increasing by 8%.
PayPal customers can use certain cryptocurrencies including Bitcoin, Ether, Bitcoin Cash, and Litecoin on the platform.
Mike Novogratz, who heads Galaxy Investment Partners, called it on Twitter “the biggest crypto news of the year,” adding that banks would be racing to serve digital currencies. “We have crossed the rubicon,” he says.
The news sparked an exuberant response from crypto fans who pointed to a series of recent announcements suggesting wider acceptance by old school financial pillars. Two state-owned companies – Square Inc. and MicroStrategy Inc. – recently said they have invested in Bitcoin. And Fidelity Investments announced in August the launch of its first Bitcoin fund, adding its business name and star power to the oft-maligned asset class.
This new PayPal is the biggest crypto news of the year. All banks will now be in a race to serve crypto. We crossed paths with the Rubicon people. Exciting day. 🔥🔥🔥🔥🔥🔥🔥🔥 https://t.co/hXpiJEDOb3
– Mike Novogratz (@novogratz) October 21, 2020
PayPal said it plans to make the features available as a source of funding for purchases from its 26 million merchants around the world and plans to expand it to Venmo soon.
Dan Schulman, president and CEO of the company, said in a statement that “the shift to digital forms of currency is inevitable, bringing clear benefits in terms of financial inclusion and access; efficiency, speed and resilience of the payment system; and the ability of governments to quickly disburse funds to citizens. “
The Bloomberg Galaxy Crypto Index, which tracks some of the biggest digital coins, also rose on Wednesday, rising to 5.1%.
Bitcoin has had a hot streak this month, rising over 15% in October. Still, the use cases for cryptocurrency remain limited. Data from blockchain researcher Chainalysis Inc. last year showed that hardly anyone was using Bitcoin for anything other than speculation.
This is in part due to its wild price fluctuations. The coin has risen by around 70% this year, but still sits around $ 8,000 from its all-time high of around $ 20,000 set in December 2017. In March, during a coronavirus-induced sale, it fell 31%.