The week in review: PayPal opens up crypto services

by Team Luno
· 4 minute read

Bitcoin is back over $16,000! It’s been a long-time coming, but the world’s largest cryptocurrency by market cap is finally approaching its all-time high again. Is it the news of Paypal’s entry into the market? Is it the slew of institutional investors queuing up to buy bitcoin? Or was it simply an inevitability given the ingenuity of Bitcoin’s design? You can check out the latest market updates here. Below, you’ll find this week’s biggest headlines.

PayPal to open up crypto services to all eligible US users

On Thursday, PayPal announced that it’s opening up its cryptocurrency services to all eligible US users, citing high demand for their limited initial offerings. The publicly traded payments giant is also raising its weekly crypto purchase limits from $10,000 to $15,000 at the time.

“We are pleased to announce that all eligible PayPal accountholders in the U.S. can now buy, hold and sell cryptocurrency directly with PayPal,” the firm said in a statement.

On an earnings call earlier this month, PayPal CEO Daniel Schulman remarked that “our base is very eager for us to offer these capabilities” and that the firm’s waiting list was bigger than expected. We could have told you that.

The lowdown on Ethereum’s blockchain bug

The Ethereum blockchain temporarily split on Wednesday as a result of a dormant bug that had been only partially fixed. Any issues have now been resolved, and the community has now shifted focus to the handling of the fix.

The bug primarily affected the Ethereum infrastructure provider, Infura, and a version of the Ethereum blockchain known as Go-Ethereum or Geth. As a result, many services that use Infura were unable to interact with the blockchain. Projects using Infura range from the likes of Ethereum wallet MetaMask, Coinbase Wallet, CryptoKitties and lending platform, Compound. Many other nodes were also affected.

According to Péter Szilágyi, team lead at the Ethereum Foundation, the bug had been dormant for two years. Ethereum Lead Developer, Nikita Zhavoronkov said: “The issue is that at some point some change to the code was introduced that led to a split between those who have upgraded and those who have not.”

In the past, Infura has been criticised as a centralised weakness in Ethereum’s decentralised architecture. The key takeaways here are that companies running nodes for other projects should regularly update them and that Ethereum could be more transparent when implementation updates are released.

Billionaire Stanley Druckenmiller: “If the gold bet works, the bitcoin bet will probably work better”

Billionaire investor Stanley Druckenmiller revealed on Monday that he owns bitcoin and spoke about why he believes it could be a better investment than gold.

In an interview with CNBC, Druckenmiller said: “I’m a bit of a dinosaur, but I have warmed up to the fact that Bitcoin could be an asset class that has a lot of attraction as a store of value.” He added that Bitcoin has “been around for 13 years and with each passing day it picks up more of its stabilisation.

He clarified that he owns more gold than bitcoin, but that “if the gold bet works, the bitcoin bet will probably work better because it’s thinner, more illiquid and has a lot more beta to it.”

Since the interview, a number of prominent industry players have commented on just what a big deal it is.

Over the course of the year, we’ve seen more and more famed investors revealing their stance on bitcoin – Paul Tudor Jones and more recently, Bill Miller – working to bolster its position as a currency that’s here to stay.

Large spike in active bitcoin addresses

The number of active addresses on the Bitcoin blockchain reached 1.18 million yesterday – a similar high to what we saw during its legendary 2017 bull run.

Hans Hauge, head of quant strategy at Ikigai asset management, noted yesterday’s spike was the seventh-highest number of active addresses in bitcoin’s history.

The current number is only 101,000 lower than bitcoin’s all-time high of 1.29 million addresses, seen on 14 December 2017, just three days before the price peaked at nearly $20,000.

Hauge added that the number of addresses sending bitcoin did indeed hit an all-time high yesterday, at 836,000 addresses, owing to the fact one bitcoin address can send BTC to multiple addresses.

What’s interesting is that despite the flurry of activity, transaction fees have remained low. Additionally, not only is the network becoming more active, the rising price has put many bitcoin holders in the green.

According to Coin Metrics, on 4 November, 98% of bitcoin addresses were in profit – at around the $14,000 price mark. Since the price is even higher, that percentage could be heading to the 99% mark.

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