Bitcoin supply scarcity has pushed the virtual currency above $19,000 for the first time in three years, and is currently priced at $19,308 on Coinbase.
The leading digital currency has been consolidating around the $18,400-18,500 mark for the past few days, while altcoins (all other crypto barring bitcoin) have been playing catch up.
Ethereum broke through the $600 barrier yesterday, although it has slipped back a little since then.
An even bigger move has been seen by Ripple’s XRP, which has more than doubled in value in the space of less than a week. It is 106% higher on a 7-day view and 25% the better over the past 24 hours, currently priced at $0.62, but has traded north of $0.70 in a remarkable rally.
XRP has been helped along – as have other altcoins – by the surge in the bitcoin price.
XRP a bridge between CBDC and crypto?
However, specifically to XRP, which is aimed at facilitating cross border transactions, chief executive Brad Garlinghouse’s comments about the central banks and XRP acting as a bridging currency between central bank digital currencies (CBDCs) and other digital assets, seems to have helped firm the renewed positive sentiment.
Litecoin (LTC) is also making steady progress towards the $100 level as its prints $88 today.
Fifth-placed coin by market capitalisation on Coinmarketcap.com, Bitcoin Cash (BCH), is 16% higher at $342 after things settle down following the hard fork on its network o 15 November.
Stellar Lumens (XLM) has been gyrating somewhat over the past 24 hours, but is 34% higher and also up nearly 100% on the week, priced at $0.15.
Bitcoin supply scarcity: PayPal and Cash app buying up newly minted bitcoin
Claims that institutional buyers are the main culprits driving the markets higher is supported by new research from crypto fund Pantera Capital. It shows that Square’s Cash app and PayPal, which has just launched its crypto offering in the US – are buying up all newly minted bitcoin.
Pantera has been tracking activity on PayPal-owned itBit crypto exchange, and it has noticed an explosion in trades on the platform.
Significantly, if the rate of buying by PayPal were to continue, demand will outstrip the supply of new bitcoins. That is of course bullish for the price.
“When other, larger financial institutions follow their lead, the supply scarcity will become even more imbalanced. The only way supply and demand equilibrates is at a higher price,” said a spokesperson at Pantera.