Yesterday, the news of fintech giant PayPal planning to roll out cryptocurrency buying and selling for Paypal and Venmo got the crypto market excited, and bitcoin went up to $9,800.
Reportedly, the company plans to build in wallet functionality for users to store their crypto in the app as well. The service could be rolled out as soon as in the next quarter.
The 300 million users base of PayPal is the reason behind this excitement as the online payments company would immediately broaden the potential investor base of cryptos. Also, Venmo comes with 50 million users, the largest consumer finance application in the US.
PayPal is planning to roll out crypto purchases in the next three months.
PayPal has 325 million users.
Venmo is the largest consumer finance app in the US.
As Paul Tudor Jones said “Bull markets are built on an ever-expanding universe of buyers.”
— Ryan Watkins (@RyanWatkins_) June 22, 2020
PayPal is also the company that froze WikiLeaks accounts, which then went the Bitcoin route. So, “It only took a decade for this to come full circle,” said developer Jimmy Song.
PayPal supporting Bitcoin no doubt will be “amazing for adoption,” but Jesse Powell, CEO of crypto exchange Kraken, warned, “don't expect PP to change their policies on account closures. They're still a centralized choke point, and the government will continue to commandeer the financial system for extrajudicial sanctions. Not your keys.”
On being countered by crypto exchanges being the same thing, Powell advised, “don’t leave more coins on Kraken than you need for your activity,” either.
“If we get a legit government order to close your account and hand over the coins, you can say goodbye to your precious savings. Great thing about crypto is you can self custody,” Powell said.
“Buy the Rumor, Buy the News, Sell the Implementation”
For now, the news of PayPal and Venmo looking into selling crypto-assets directly to their customers is based on some industry sources, and there is no knowing if it will be true.
“Still, the headline itself is more than enough to add fuel to this massive risk-on rally. So in the words of Louis Jordan. … Let the Good Times Roll,” wrote analyst Mati Greenspan in his daily newsletter.
Though a rumor currently, speculation around Facebook launching Libra started similarly in February 2019. And when the social media giant announced the launch in June, “the market roared higher,” said economist and trader Alex Kruger.
He also pointed out how several pieces of news paid handsomely in the past two years in the crypto space. In 2017, ETF rejection, China banning bitcoin, CME futures launch, the likes of CFTC sending subpoena Bitfinex and Tether, and fake news of ETF confirmation was such news. Then in 2019, we saw the market reacting to Libra and Chinese President Xi Jinping supporting blockchain technology.
Crypto Twitter is populated by shitty speculators who have been been burned too many times by fomoing into news late and who's learned to trade based on retarded meme lines such as "Buy the Rumor, Sell the News".
— Alex (@classicmacro) June 22, 2020
Instead of ‘Buy the Rumor, Sell the News,” the right thing to do is ‘Buy the News’ as well, and ‘Selling the implementation’ is best, he said.
“Crypto going mainstream! This would be massive and should help prices run over those pesky call sellers,” Kruger said.