CRYPTO MOVERS AND PRICES
Crypto Story of the Day
The PayPal announcement has sent crypto to its highest levels since mid-2019 In spite of the move, market dynamics remain far from frenzied.
The last time BTC and crypto reacted this strongly to a corporate announcement it was following Facebook’s release of its Libra white paper in 2019. At the time we expressed uncertainty that the project would ever go live, furthermore, it was far less clear what the launch of some private payment channel would have on BTC demand.
This is far less ambiguous. PayPal is providing crypto functionality to users at a scale that has arguably never been seen before. Additionally, they’re relying on proven infrastructure with a track record so the likelihood of success is majorly derisked. Ironically, the media has been far more reluctant to call the PayPal story the game-changer that it is, likely because of how burnt those calls were following the misunderstood Libra announcement. While PayPal shares have since returned to pre-announcement levels, hopefully, the initial positive market reaction gives confidence to other financial service providers considering entering the space.
In spite of the USD 1,000 rally this week, many of the speculative indicators we look to remain far from stretched. Items such as perpetual swap funding rates on crypto-settled derivative exchanges and USD peer-to-peer lending rates remain far from what would be considered speculative frenzied levels. We think such a fundamentally important news item combined with a relatively balanced market increases the likelihood of a sustained bullish move.