At the beginning of October, Bitcoin’s price was particularly indecisive and trading slightly above $10,000, causing many to believe that the unfilled CME gap down at $9,600 would soon be closed.
Fast forward to the current date, October 27th, BTC is trading at $13,400, having just marked a fresh high for 2020. The cryptocurrency added around $3,000 to its value, representing an increase of around 30%.
With this said, this month was also quite eventful. Many things happened, and, as such, let’s have a look at five possible reasons that could have led to this substantial price increase.
PayPal Announcing Support for Bitcoin, Bitcoin Cash, Litecoin, and Ethereum
Undoubtedly, the most important piece of news that came out this month was PayPal announcing support for cryptocurrencies.
Now, PayPal is the world’s largest online payment processor. Data from Statista shows that for the second quarter of 2020, the company has processed over $221 billion. Moreover, the company has a network of over 26 million vendors, and it plans to enable users to spend their BTC at all of them, starting in early 2021.
Additionally, it’s worth noting that PayPal is a widely-accepted payment method, and most of the banks allow transfers from and to the platform. On the contrary, not a lot of banks support Bitcoin transactions, meaning that they would either have to reconsider their policy, or they would have to drop PayPal as a client altogether.
At this point, it’s unclear how this will be resolved, but it’s exciting to see how the situation develops. If one thing is certain, though, it would put Bitcoin and other cryptos at the forefront of an important discussion.
Major Banks Starting to Change Their Attitude Toward Bitcoin
There’s no clearer example here than JP Morgan – one of the world’s largest multinational investment banks.
The relationship between the bank’s CEO, Jamie Dimon, and Bitcoin is one worth following. In 2017, the high-ranked executive said that BTC is afraid and that if he saw any of his traders dealing with it, he would “fire them in a second.”
Well, fast forward a few years, and now the bank is posting bullish predictions on that very same cryptocurrency that Dimon labeled a fraud.
Just a few days ago, JP Morgan said that even a modest switch in capital from gold to Bitcoin could see its price triple.
Number of Publicly-Listed Companies Which Buy Bitcoin Increases
Perhaps as a direct consequence of the above, we can already see an increased involvement from publicly-listed companies.
The biggest buyer who put Bitcoin on its balance sheet became MicroStrategy, with its massive $425 million investment. Its CEO, Micael Saylor, has been particularly vocal about BTC’s merits.
Jack Dorsey’s Square also jumped on the bandwagon, purchasing $50 million worth of Bitcoin earlier this month.
Below is a list of all the publicly-listed companies and their holdings in BTC.
Publicly-listed companies putting BTC on their balance sheet is a huge deal for the nascent cryptocurrency, and industry experts have it that this effect will only snowball.
Singapore’s Biggest Bank Reportedly Launches a Bitcoin Exchange
As CryptoPotato reported just today, DBS Bank, a Singaporean multinational banking and financial services corporation and the city-state’s largest bank, has reportedly launched an exchange that offers fiat-to-cryptocurrency trading pairs.
Purportedly, the new exchange would support the “top digital currencies in circulation,” namely Bitcoin, Bitcoin Cash, Ethereum, and Ripple’s XRP. Traders would be able to exchange them against SGD, HKD, JPY, and USD.
More interestingly, the exchange would supposedly only accept financial institutions and professional market makers, as its users. The venue would be regulated by the Monetary Authority of Singapore, which is also its de-facto central bank.
Needless to say, a central bank-backed and regulated exchange aimed at institutional investors should, in theory, facilitate the involvement of larger players in the field.
Uncertainty Around the Upcoming 2020 US Presidential Elections
Undoubtedly one of the most important moments for the global macroeconomic outlook is the upcoming US Presidential Elections, set to take place on November 3rd.
CryptoPotato did a survey, and it turned out that the elections are the biggest concern for Bitcoin investors in 2020.
It is, perhaps, no surprise that billionaire Paul Tudor Jones III came up with a statement, saying that he likes “Bitcoin even more now than then [when he bought BTC in May].” He also said that it’s going to be the best inflation trade.