Bitcoin surged 8 per cent during overnight trading in New York to break past $13,000 for the first time since 2019 after global online payment provider PayPal said on Wednesday it will allow customers to use cryptocurrencies.
The digital coin increased another 2 per cent to $13,119 during early trading in Asia on Thursday. Other digital coins also gained on PayPal's news, including litecoin, which rose more than 13 per cent, and Bitcoin Cash, up 9 per cent.
"The upward momentum in the Bitcoin price wasn't anything more than a pump...Bitcoin is a kind of beast that can move more than $4,000 a day, and this is what we were expecting," Naeem Aslam, chief market analyst at Avatrade, said.
PayPal's US users will be able to use the new digital coin service over the coming weeks, the US company said in a statement.
"Yes, PayPal expecting Bitcoin as a form of payment is the most important development, and it is the biggest news since the crypto king made an all-time high of $20,000. This was going to happen – PayPal accepting cryptos," Mr Aslam said.
"However, if one thinks that this will change regulators' stance very soon, you may be setting yourself up for a surprise. These things do not move that fast; regulators will not allow cryptos to replace fiat currencies."
PayPal users will initially be able to buy, sell and hold Bitcoin and other cryptocurrencies such as ethereum, Bitcoin cash and litecoin. The company has obtained a conditional cryptocurrency licence from the New York State Department of Financial Services and partnered with New York-based FinTech start-up Paxos to deliver the service.
The payments giant intends to bring the function to its Venmo platform and plans to introduce it to certain international markets in the first half of next year.
The shift to digital forms of currencies is inevitable
PayPal customers in markets outside the US will be able to use cryptocurrencies to shop from 26 million merchants on its network from next year, the company said. Cryptocurrency payments on the platform will be settled using fiat currencies, such as the US dollar, meaning merchants will not receive payments in virtual coins.
“The shift to digital forms of currencies is inevitable,” Dan Schulman, PayPal's president and chief executive, said. “We are eager to work with central banks and regulators around the world to offer our support, and to meaningfully contribute to shaping the role that digital currencies will play in the future of global finance and commerce.”
The coronavirus pandemic has accelerated the shift away from cash towards digital payments. When Covid-19 struck, Bitcoin asserted itself as a safe haven for panicking investors. With the US Federal Reserve and other central bankers launching stimulus programmes and devaluing paper currencies, hard assets such as cryptocurrencies and gold with limited supply have appreciated in value.
PayPal, based in San Jose, California, hopes the service will encourage global use of virtual coins and prepare its network for new digital currencies that may be developed by central banks and corporations.
Many central banks around the world have expressed their intention to develop digital versions of their currencies in the coming years.
Financial technology companies have dabbled in cryptocurrency over recent years. Mobile payments provider Square first allowed some customers to buy and sell Bitcoin through its app about three years ago. Stock trading app firm Robinhood also allows users to buy and sell cryptocurrencies. But PayPal’s move could provide a boost to cryptocurrency use due to its vast reach.
The Silicon Valley payments giant has 346 million active accounts around the world and processed $222 billion in payments in the second quarter.
PayPal was also one of the initial founding members of Libra association, a cryptocurrency project formed by Facebook in 2019. However, it was one of the first companies that dropped out after regulatory pressure mounted on the venture.
But interest in cryptocurrencies is resurging despite the reluctance of mainstream lenders to engage with it.
This week, Bitcoin yet again tested the $12,000 mark for the second time this year. However, prices remain far below the levels seen during the trading frenzy in 2017 when Bitcoin's value touched record highs.
What are the influencer academy modules?
- Mastery of audio-visual content creation.
- Cinematography, shots and movement.
- All aspects of post-production.
- Emerging technologies and VFX with AI and CGI.
- Understanding of marketing objectives and audience engagement.
- Tourism industry knowledge.
- Professional ethics.
UAE currency: the story behind the money in your pockets
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Company name: baraka
Started: July 2020
Founders: Feras Jalbout and Kunal Taneja
Based: Dubai and Bahrain
Sector: FinTech
Initial investment: $150,000
Current staff: 12
Stage: Pre-seed capital raising of $1 million
Investors: Class 5 Global, FJ Labs, IMO Ventures, The Community Fund, VentureSouq, Fox Ventures, Dr Abdulla Elyas (private investment)
How to keep control of your emotions
If your investment decisions are being dictated by emotions such as fear, greed, hope, frustration and boredom, it is time for a rethink, Chris Beauchamp, chief market analyst at online trading platform IG, says.
Greed
Greedy investors trade beyond their means, open more positions than usual or hold on to positions too long to chase an even greater gain. “All too often, they incur a heavy loss and may even wipe out the profit already made.
Tip: Ignore the short-term hype, noise and froth and invest for the long-term plan, based on sound fundamentals.
Fear
The risk of making a loss can cloud decision-making. “This can cause you to close out a position too early, or miss out on a profit by being too afraid to open a trade,” he says.
Tip: Start with a plan, and stick to it. For added security, consider placing stops to reduce any losses and limits to lock in profits.
Hope
While all traders need hope to start trading, excessive optimism can backfire. Too many traders hold on to a losing trade because they believe that it will reverse its trend and become profitable.
Tip: Set realistic goals. Be happy with what you have earned, rather than frustrated by what you could have earned.
Frustration
Traders can get annoyed when the markets have behaved in unexpected ways and generates losses or fails to deliver anticipated gains.
Tip: Accept in advance that asset price movements are completely unpredictable and you will suffer losses at some point. These can be managed, say, by attaching stops and limits to your trades.
Boredom
Too many investors buy and sell because they want something to do. They are trading as entertainment, rather than in the hope of making money. As well as making bad decisions, the extra dealing charges eat into returns.
Tip: Open an online demo account and get your thrills without risking real money.
10 tips for entry-level job seekers
- Have an up-to-date, professional LinkedIn profile. If you don’t have a LinkedIn account, set one up today. Avoid poor-quality profile pictures with distracting backgrounds. Include a professional summary and begin to grow your network.
- Keep track of the job trends in your sector through the news. Apply for job alerts at your dream organisations and the types of jobs you want – LinkedIn uses AI to share similar relevant jobs based on your selections.
- Double check that you’ve highlighted relevant skills on your resume and LinkedIn profile.
- For most entry-level jobs, your resume will first be filtered by an applicant tracking system for keywords. Look closely at the description of the job you are applying for and mirror the language as much as possible (while being honest and accurate about your skills and experience).
- Keep your CV professional and in a simple format – make sure you tailor your cover letter and application to the company and role.
- Go online and look for details on job specifications for your target position. Make a list of skills required and set yourself some learning goals to tick off all the necessary skills one by one.
- Don’t be afraid to reach outside your immediate friends and family to other acquaintances and let them know you are looking for new opportunities.
- Make sure you’ve set your LinkedIn profile to signal that you are “open to opportunities”. Also be sure to use LinkedIn to search for people who are still actively hiring by searching for those that have the headline “I’m hiring” or “We’re hiring” in their profile.
- Prepare for online interviews using mock interview tools. Even before landing interviews, it can be useful to start practising.
- Be professional and patient. Always be professional with whoever you are interacting with throughout your search process, this will be remembered. You need to be patient, dedicated and not give up on your search. Candidates need to make sure they are following up appropriately for roles they have applied.
Arda Atalay, head of Mena private sector at LinkedIn Talent Solutions, Rudy Bier, managing partner of Kinetic Business Solutions and Ben Kinerman Daltrey, co-founder of KinFitz
