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With Bitcoin nearly touching $19,000 in the last few days, many analysts are of the opinion that BTC still has room to grow to as much as $500,000.
Institutional investors are now ramping up their purchase of Bitcoins.
ARK Invest CEO Catherine Wood suggested that if all institutions would assign even a mid-single-digit allocation to Bitcoin on their portfolio, its value would increase tremendously.
“The cryptocurrency could rise to somewhere in the $400,000 to $500,000 range,” she told news outlet Barron’s during an online event.
Woods said institutions have been increasing their allocation of Bitcoin, and their numbers are increasing significantly.
The ARK Investment CEO compared this movement to the early days when institutions first moved to real estate and emerging markets.
“They started out with a half a percent allocation, then 1%, then 5%,” she said.
Bitcoin is seen by investors – retail and institutions alike – as a digital version of gold or as a hedge against inflation.
The weakening dollar contributed to this “Bitcoin is digital gold” narrative. Quantitative easing or the effort to put more cash into the financial system to jolt the economy with spending has weakened the dollar.
This served as a catalyst for even large companies, including publicly-listed MicroStrategy, to turn much of their cash reserves into Bitcoin last August.
Wood has noted that Bitcoin’s supply is definite – at 21 million BTC. So far, 18.5 million BTC has already been mined. If institutional investors take a greater interest in Bitcoin, it could send the price even higher, she added.
Bitcoin closed Sunday at $18,437 after reaching as high as $18,900 the previous day, a new 2020 high for the benchmark cryptocurrency.
Bitcoin was the best performing major cryptocurrency in the past month, increasing by 36% in the last 30 days. It is also up 158% since the beginning of the year and up 380% since March 2020.
In other Trending Bitcoin News today:
Paypal Bought 70% of All Newly Mined Bitcoin Last Month as Demand Rockets
Paypal bought up to 70% of all the newly mined bitcoin since the payments giant started offering cryptocurrency services four weeks ago.
Now that’s according to estimates by hedge fund manager Pantera Capital, as revealed in its latest monthly blockchain letter.
Together with Square’s Cash App, the two companies are buying more than 100% of all newly issued virgin bitcoin, it says.
The letter said demand for Paypal’s crypto service, which runs on Paxos fiat-to-crypto exchange, Itbit, had hit the roof. The exchange “was doing a fairly constant amount of trading volume… [but] when Paypal went live, volume started exploding,” it observed, adding:
The increase in Itbit volume implies that within four weeks of going live, Paypal is already buying almost 70% of the new supply of bitcoins.
Paypal announced in late October that its customers – running in excess of 300 million active users – will now be able to buy, hold and sell bitcoin and other digital assets using their Paypal accounts.
The decision also meant users could use their coins to buy things from the 26 million merchants that accept Paypal, it said. Paypal rolled out the crypto service to U.S. customers early this month, with the rest of the world set to be integrated later.
Bitcoin prices rose alongside the Paypal news, breaching $12,000 at the time the service was announced, and has maintained the bullish momentum ever since, hitting a three-year high of $18,997 on Nov. 20.
Pantera Capital noted that the Paypal crypto service is “already having a huge impact”. As shown in the graph above, it predicted that if the “growth persists, Paypal alone would be buying more than all of the newly-issued bitcoin within weeks.”
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