But amidst it all, there’s another reason to be optimistic about the long-term potential for BTC-USD.
PayPal subsidiary Venmo announced on April 20 that its 70 million-plus users will now be able to buy, hold and sell cryptocurrencies on its mobile app. Venmo’s move to offer its users crypto access extends PayPal’s foray into the crypto world, as PayPal users can already pay online merchants globally in crypto.
Why This Is A Big Deal for Bitcoin
For the record, the original purpose of bitcoin is to become a widely adopted peer-to-peer money that people actually spend.
In order for that to happen, people need to have easy access to the cryptocurrency. And widespread institutionalization is the fastest way to get crypto into people’s hands because large institutions already have the users, according to a report from Big Four accounting firm KPMG.
According to the report:
“Cryptoassets have potential. But for them to realize this potential, institutionalization is needed. Institutionalization is the at-scale participation in the crypto market of banks, broker-dealers, exchanges, payment providers, fintechs, and other entities in the global financial services ecosystem. We believe this is a necessary next step for crypto to create trust and scale.”
Venmo’s move is another step towards at-scale institutionalization of crypto. Cash App, a competing payment application from Jack Dorsey’s Square, already offers crypto access to its 30 million-plus users. The image below, provided by BofA Securities, shows notable institutional bitcoin adoption moves since Q3 2020.
What Does This Mean for Bitcoin Price?
On April 20, the day Venmo announced its new crypto offering, bitcoin recovered some of its losses from the recent crash, rising roughly 1.5% on the day. However, the announcement hasn’t been enough to push bitcoin into another rally. On the contrary, BTC-USD has dipped further than the price level when Venmo made its announcement.
At present, fears about a reported crackdown by the U.S. Treasury on the use of digital assets for money laundry, coupled with a reported blackout in the Xinjiang region of China, appear to be more significant factors for bitcoin. To clarify, Xinjiang is home to several bitcoin mining farms, and a blackout there significantly reduces the global hash rate for the bitcoin network.
While it’s difficult to tell when bitcoin price will recover from its recent losses, the Venmo announcement provides another assurance that bitcoin is here to stay. As more institutions begin to offer their customers access to bitcoin, the cryptocurrency’s demand will continue to surge, as more people would have easier access to it. Also, as more people start owning bitcoin, its use case as a medium of exchange will continue to evolve.
Given that the crypto market is still in its nascent stage, I believe the crypto market will continue to experience periods of high volatility. However, I believe that any institutional adoption announcement is a signal to buy and “hodl“ for the long-haul.
Source: fintechs.fi - Fintech News