7 November 2020
The cryptocurrency market has surged over the last week, as the US presidential election drags on. With uncertainty in the air, investors are questioning whether it’s a good time to buy Ethereum or whether they should save up to buy Bitcoin with PayPal when it becomes available.
Over the few days, Bitcoin (BTC) rallied past $15,500 levels to make a new 2020-high. Interestingly, the BTC price rally has been followed by a rally in the altcoin market, led by Ethereum (ETH) which has eclipsed 235% for year to-date gains.
Looking at new developments, Ethereum 2.0’s launch has driven excitement with investors who have been waiting patiently for several years to participate in staking for passive income. Concurrently, PayPal has been preparing for its entry in the crypto market as it announced that they will support central bank digital currencies (CBDCs) on its new digital payment infrastructure.
Wait To Buy Bitcoin with PayPal in 2021 or Capitalize on Bitcoin Price Uptick?
The biggest news of the week that has grabbed the attention of crypto enthusiasts is the Bitcoin price movement. In a massive rally over the last week, Bitcoin (BTC) has surged 15% moving past $15,500 to make a new 2020-high of $15,870.
At press time, Bitcoin (BTC) is trading at a price of $15,521 with a market cap of $286 billion. This is for the first time since January 2018 that BTC price has moved above $15,000 levels.
Continuing its rally over the last month, BTC surged 15% over the last week as the bulls raged-in. With this move, Bitcoin’s year-to-date gains have moved above 110% outclassing all other asset classes like gold, stocks, silver etc.
Digital asset manager Grayscale is on a constant buying spree, as they’ve added over 16,000 Bitcoins over the last week. Also, the “accumulation addresses” for Bitcoin have hit a record high suggesting higher retail participation.
In light of rising COVID-19 cases, investors are looking at what the potential impact will be to traditional markets. On Thursday, Federal Reserve Chairman Jerome Powell said that it will take a while for the economy to recover as uncertainty hits the markets
Interestingly, the overall cryptocurrency market is showing strength with a rally in the altcoin space. Almost all of the top-ten cryptocurrencies have surged between 4-10% at the time of writing this article.
Historically, a rally in the altcoin market often follows increasing Bitcoin (BTC) prices. Once Bitcoin starts to “cool off,” investors generally move money to altcoins. History seems to be repeating itself as Ethereum (ETH) has spiked in the last week.
Time To Buy Ethereum As ETH 2.0 Deposit Contracts Go Live?
Ethereum (ETH) is one of the top performers for 2020. The 200%+ gains in 2020 have created a frenzy for investors to buy Ethereum in face of strong demand for Bitcoin.
In a breakthrough achievement earlier this week, Ethereum chief developer Afri Schoedon announced the launch of Deposit Contracts for Ethereum 2.0 (ETH 2.0). The deposit contracts usually serve as a badge between the existing Proof-of-Work (PoW) mainnet and the upcoming Proof-of-Stake (PoS) blockchain network.
The genesis time of the Ethereum 2.0 network, which is when the Beacon Chain will go live, is scheduled for December 1. With the deposit contracts going live, stakers can now start depositing 32 ETH – the minimum threshold to stake on Ethereum 2.0. For the Beacon Chain to go live, a total of 524,288 ETH should be there in the contract.
After December 1, stakers will start receiving the staking rewards with annual returns between 8-15%. Speaking to CoinDesk, Ethereum 2.0 researcher Danny Ryan said:
“We’re all excited. This has been a long time coming, and countless researchers, engineers, and community members have put blood, sweat, and tears into this project. Feels good to finally bootstrap Ethereum’s long-awaited proof-of-stake consensus.”
After this statement, the price of Ethereum (ETH) surged 15% to $440 with a $50 billion market cap.
PayPal Announces Support of CBDCs
Earlier this week, PayPal CEO Dan Schulman provided additional details of the company’s recent entry in the crypto space. Investors eagerly awaiting the moment that they can buy Bitcoin with PayPal while monitoring how the bump in demand will increase the overall price of BTC.
After announcing the launch of its crypto trading services in late October 2020, Schulman disclosed further plans of launching the service worldwide, including shopping tolls and working with central banks to support upcoming CBDCs (Central Bank Digital Currencies).
The PayPal CEO spoke about how quickly the digital payments market has evolved with new technological infrastructure taking dominance in the financial services sector. Speaking on the matter, Schulman said:
“Clearly the world is rapidly moving from physical to digital. “There is no question that digital currencies are going to be rising in importance, having increasing functionality, and increasing prominence.”
Furthermore, Schulman spoke about the developments within the traditional financial markets like banks, regulators, and crypto industry leaders. “CBDCs […] are a matter of when and how they’re done, and not if,” he said while adding that legacy financial systems are “not working” for many people.
The PayPal CEO has said that his company will “help shape the utility of [CBDCs]”. He added that PayPal will ensure the interoperability of CBDCs with the existing payment rails along with fostering acceptance among global merchants.
PayPal’s entry in the crypto space has already created a frenzy among its users and other global players. The excitement to buy Bitcoin with PayPal is palpable, as it’s expected to increase the overall utility of Bitcoin and interest in how other leading financial service providers will incorporate cryptocurrency into their offerings.
The company has received a massive response from its existing customers that are eager to buy Bitcoin with PayPal and trade cryptocurrencies. Currently, only 10% of U.S. customers have access to PayPal’s crypto services. Schulman said that all of the U.S. will get access before December 2020.