The rumor that the payment giant, PayPal, will launch the crypto buying and selling service, dropped like a bomb. There was a sudden increase in Bitcoin (BTC) immediately after the news appeared. So how did this cause this dynamism in the leading crypto asset?
The ability to buy and sell cryptocurrencies via PayPal is particularly important for Bitcoin, which has a limited supply. According to the latest data, there are 305 million registered and active user accounts on PayPal today. The number of users of the giant company, which was established in 1998, continues to increase day by day.
PayPal, which continued on its way with eBay from the late 90s to the 2000s, later parted ways with Ebay. PayPal recently expanded its user base by incorporating the popular payment application Venmo. The company’s CEO told the press recently that the number of users has increased rapidly and they aim to reach 52 million active users by the end of this year.
The opening of Bitcoin and other cryptocurrencies to such a wide audience, of course, cannot be overlooked. But for those who do not fully understand the impact of this, it would be more decisive to compare these figures with the maximum supply of Bitcoin.
Bitcoin is digitally designed to be a limited number, which protects the leading crypto asset against the effects of inflation. Although miners still continue to issue BTC, the maximum number of Bitcoins will never increase.
Limited to 21 million BTC, Bitcoin will not be enough for every millionaire on Earth. Considering the world population is 7.8 billion and assuming that everyone wants BTC, 0.0026 BTC can be given to everyone to distribute the asset equally.
Even if it is distributed evenly to 305 million users of PayPal, it will only drop 0.068 BTC per user. Even if half of Bitcoins per user are distributed, if 52 million users are distributed equally to every user of Venmo, who wants to reach its target at the end of the year.
However, as we have seen especially from the dollar, this cake in the middle will never be distributed evenly. Wealthy individuals will buy the lion’s share, which will further increase the scarcity of Bitcoin.
On the other hand, there are thousands of BTCs that have been lost for many reasons such as forgotten private keys, people who died, addresses that were chosen incorrectly. With all this, the supply will become very limited.
If Bitcoin’s theory that creative Satoshi Nakamoto’s wallet holds 1 million BTC is true, it seems that access to these Bitcoins will not be possible either. The completion of the maximum supply will continue until 2140.
This is the biggest reason for PayPal news falling into the crypto community like a bomb. It is not surprising that such a demand for a limited number of assets can affect Bitcoin’s price upwards.
Bitcoin (BTC) is trading at $ 9,645 as of writing.