The bitcoin rate approached the maximum values for this year. Analysts are trying to understand what was the reason that pushed the king of cryptocurrencies to rise and whether the rally will continue.
Undoubtedly, the successful testing of the digital yuan (Digital Currency Electronic Payment, DCEP) has become positive for the crypto market. After that, the head of the People’s Bank of China, Yì Gang, made a loud statement in favor of the state cryptocurrency. The digital yuan will make payments safe and boost China’s economy, he said. The demand of the population for cryptocurrency is growing, according to the official.
He made this conclusion based on the sales data of the largest trading platforms, including Alibaba, as well as the investment holding Tencent and the Chinese search engine Baidu. China has confirmed that the digital yuan will gain widespread acceptance at the Beijing Winter Olympics. Obviously, the news from China was the fundamental factor that pushed the market up. But that’s not all.
PayPal has announced support for cryptocurrencies including Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC). To make this possible, a wallet will be created in the system. It is noteworthy that until the end of the year, no fees will be charged when buying/selling cryptocurrencies. Possibly in 2021 the fee will be minimal for the market too. And a plus is that the PayPal crypto wallet will make it possible to pay for purchases at 26 million merchants around the world. This is stated in today’s news on the official PayPal website.
PayPal also published data from The Bank for International Settlements, according to which, in the next three years, at least 10% of the world’s central banks intend to issue their own cryptocurrency (central bank digital currency, CBDC). Dan Schulman, CEO of PayPal, states:
” The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly.”
Shulman notes that PayPal can act as a catalyst for this transition, as it has expertise in both global trade and digital technologies. Therefore, the crypto wallet in PayPal will become available to all users in the coming weeks. And it will be free to store cryptocurrency. PayPal will also provide all its users with educational content about cryptocurrencies and their use.
Such high-profile statements as the announcement of the head of the People’s Bank of China and the head of PayPal had a positive impact on the crypto market in general. However, analysts doubt the effect will be long-term and that Bitcoin’s rally will be continued.