Bitcoin on the brink of fresh 2020 high following PayPal embrace

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Bitcoin approached a high for the year after PayPal Holdings Inc. announced it will allow customers to use cryptocurrencies.

The largest digital coin gained as much as 4.7% to $12,464 Wednesday, just below the high for the year of $12,473 set in August. Passing that threshold will put it near its highest point since July 2019.

PayPal customers can use select cryptocurrencies including Bitcoin, Ether, Bitcoin Cash and Litecoin on the platform.

Mike Novogratz, who runs Galaxy Investment Partners, on Twitter called it “the biggest news of the year in crypto,” adding that banks will embark on a race to service digital currencies. “We have crossed the rubicon,” he said.

The news sparked an exuberant response from crypto fans who pointed to a string of recent announcements that suggest wider acceptance by old-school financial mainstays. Two public companies -- Square Inc. and MicroStrategy Inc. -- said recently that they invested in Bitcoin. And Fidelity Investments announced in August that it’s launching its first Bitcoin fund, adding its establishment name and star power to the often-maligned asset class.

PayPal said it plans to make the features available as a funding source for purchases at its 26 million merchants worldwide and plans to expand it to Venmo soon.

Dan Schulman, the firm’s president and chief executive officer, said in a statement that “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.”

The Bloomberg Galaxy Crypto Index, which tracks some of the largest digital coins, also advanced Wednesday, rising as much as 4.3%. Bitcoin Cash and Litecoin each gained at least 7%.

Bitcoin’s been on a hot streak this month, rising more than 15% in October. Still, cryptocurrency use cases remain limited. Data from blockchain researcher Chainalysis Inc.last year showed hardly anyone used Bitcoin for anything beyond speculation.

Partly it’s due to its wild price swings. The coin is up about 70% this year but is still around $8,000 away from its all-time high of about $20,000 set in December 2017. In March, during a coronavirus-induced selloff, it fell 31%.

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