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Has PayPal added legitimacy to Bitcoin?

UK customers can now buy, hold and sell digital currencies through the platform


Pete Carvill

The price of Bitcoin fluctuated wildly this week, hitting $50,000 on Monday but—according to the most recent statistics by Morningstar—falling to $46,893.50 by Thursday morning (other sources put the figure at just north of $47,000).

After halving in value earlier this year, the cryptocurrency has been building back slowly. But this week saw it rise above $50,000 for the first time since May. This came as more than $188bn was transferred on Tuesday, in what The Independent said was ‘[…] more than two thirds more than it experienced during the price run that took it to an all-time high back in April’.

This year has seen the value of the ‘currency’, according to coindesk, go above $60,000. Although the price within the past 24 hours has dipped a little over 2%, the growth in Bitcoin’s value appears to be on an upward trajectory.

Wider acceptance

A possible contribution to the rise was the announcement by PayPal earlier this week that it would now let customers in the UK buy, hold, and sell digital currencies. As reported by CNBC, the payment service provider will now allow customers to deal in Bitcoin, Bitcoin cash, Ethereum, and Litecoin.

As CNBC explained: “Like the US version of the product, PayPal is relying on Paxos, a New York-regulated digital currency company, to enable crypto buying and selling in the UK PayPal said it has engaged with relevant UK regulators to launch the service.”

Perhaps tellingly, a spokesperson from the UK’s Financial Conduct Authority was unable to comment on the move.

Inevitable conclusion

This week’s moves towards legitimacy offer some respite for those investing in Bitcoin, after authorities in China earlier this year essentially banned its trade and usage. After experiencing a great run earlier in the year, the actions of China’s government took a lot of the steam out of bitcoin.

Cryptocurrencies are not without their many critics who point out that they are barely regulated and backed and fueled only by speculation. Writing on Morningstar, Susan Dziubinski made the case that some form of cryptocurrency will now always exist in the market.

Dziubinski wrote: “Cryptocurrencies in 2021 are like Beanie Babies in the mid-1990s: of high interest among a wide variety of people. Many are watching from the sidelines for what’s next or only dipping a toe in. Others, however, think they’ll hit pay dirt if they buy the right crypto at the right time. Is Bitcoin the best crypto to buy today? What about Litecoin? Or Ethereum? Of course, only time will tell whether today’s interest in all things crypto is a speculative fad or whether crypto really can be a viable, emerging asset class for an investor’s tool kit. But either way, digital currencies are likely here to stay, at least in some form.”