The PayPal application can be seen on a mobile phone.
Felix Kästle | picture alliance | Getty Images
Fintech companies are helping fuel demand for bitcoin as they open the floodgates for millions of people to trade it.
By one firm’s analysis, PayPal and Square clients have been buying the majority of the new bitcoin supply entering the market each day. Hedge Fund Pantera Capital estimates that Square clients have accounted for 40% of bitcoin that enters the market in the two years since the product launched.
PayPal may be responsible for even more demand since launching just a few weeks ago. The payment company partnered with crypto firm Paxos for custody and trading. Volume on Paxos’ exchange, itBit, had been consistently in the same range since September. But as PayPal went live recently, volumes on the exchange more than tripled, according to data from CoinGecko.
Pantera estimated that within three weeks, PayPal clients were already buying roughly 70% of the new supply of bitcoin.
“It’s having a significant increase on price,” said Dan Morehead, founder and chief investment officer of Pantera Capital and former CFO at Tiger Management. “You bring on two corporates that are already buying all of the newly issued bitcoins — supply and demand says the price has to go up.”
PayPal’s implied bitcoin volume