Digital Assets: Crypto Volume On PayPal Scales Record High
Crypto assets worth $242 million were traded on PayPal on Monday, January 11.
Data revealed by crypto market aggregator Nomics showed that crypto-assets trading volume of $242 million on PayPal (NASDAQ: PYPL) on January 11 overshadowed its previous daily record of $129 million on January 6, 2021. (COIN TELEGRAPH)
PayPal a proxy for the retail side?
Daily crypto volume on PayPal has grown by 950% since January 1. Significantly, the rise has come in tandem with the meteoric rise in the price of bitcoin, the leading cryptocurrency.
Year-to-date, BTC/USD has returned 22.69%, and over the last 1 year, 306.99%.
The sharp rise in trading crypto volumes on the PayPal platform may be an indicator of increasing participation by retail investors.
It may be noted that much of the credit for the recent rise in bitcoin has been laid at the door of institutional investors, with retail investors thought to be sitting on the sidelines.
But the key question that arises is whether retail investors on PayPal sold into this uptrend and booked profits. Did they cause the massive cut in BTC from $41,800 on Friday to a low of $30,300 on Monday?
Nexo CEO thinks so
Nexo CEO Antoni Trenchev told Coin Telegraph that small investors, who are “more prone to selling quickly,” triggered the BTC price crash through a flurry of sell transactions in recent days.
CNBC estimates that the crash wiped out $150 billion in value from the crypto-assets market. However, Simons Chen, executive director of investment and trading at cryptocurrency financial services firm Babel Finance, feels that the event was a correction due to profit-taking in the market considering the rapid rise in BTC from $20,000 to past $40,000 levels.
Another view is that BTC’s drop coincided with the bounce in the US Dollar and the US bond yields. Generally, bitcoin and the dollar index have tended to move in opposite directions over the past 10 months.
Correction or reversal? Time will tell.
Related Story: Paypal Sends Bitcoin Into Orbit
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