PayPal Cuts Cryptocurrency Holdings, Reveals Why Bitcoin Is Rising to $72,000
Date: 2024-10-31 Author: Henry Casey Categories: BUSINESS
According to PayPal’s filing with the U.S. Securities and Exchange Commission, the company’s cryptocurrency holdings fell nearly 11% from the second to the third quarter, to $2.17 billion. Despite Bitcoin’s 8% gain over the same period, the company’s holdings of the cryptocurrency fell 1% in dollar terms from June 30 to September 30. Similarly, PayPal’s Ether holdings fell 27%, outpacing its 22% decline in price.
In addition to Bitcoin and Ether, PayPal also allows users to trade Bitcoin Cash, Litecoin, and PayPal’s own stablecoin, the USD. The company’s holdings of these cryptocurrencies also fell.
Institutional Demand Growing
Research firm CryptoQuant notes that institutional demand for Bitcoin is increasing. According to founder and CEO Ki Young Ju, less than half of the Bitcoin flowing into U.S. spot exchange-traded funds (ETFs), which are 80% retail-focused, is being redistributed into so-called “whale wallets” with more than 1,000 Bitcoin. Institutional investors hold about 670,000 Bitcoin, compared to 278,000 held by retail traders.
Since January, when spot Bitcoin ETFs launched in the U.S., nearly $23.3 billion has been attracted to these financial instruments, according to SoSo Value. The leading funds are Blackrock, Grayscale, and Fidelity, which control the largest assets.
According to a research note from Bitwise, the number of institutional investors investing in bitcoin ETFs increased by 14% between the first and second quarters of this year. “Institutions are coming into the market, and they are coming at a significant scale,” said Bitwise chief investment officer Matt Hougan.
