First Mover: The FOMO Takes Over as PayPal Play Sparks Bitcoin Rally to $13K

Bitcoin (BTC) was higher and positively asserted itself after jumping 7.4% on Wednesday to a new 2020 high. It was the largest daily increase in nearly three months.
The $ 12,000 rise, with prices currently around $ 13,000, came after consumer payments giant PayPal (PYPL) announced that it would allow its 346 million customers to hold Bitcoin and other cryptocurrencies and use the digital assets to its network to buy into its 26 million retailers.
"Traders are now looking for BTC to test the long-term $ 14,000 resistance from 2019 that we believe should break in the coming months," wrote Lennard Neo, research director for cryptocurrency-focused structured products company Stack Funds early Thursday in a report.
See also: Market Wrap: Bitcoin stays at around $ 13,000 while Ether is locked in DeFi dips
In traditional markets, European indices fell and U.S. stock futures pointed to a lower opening as Washington lawmakers failed to agree on a new stimulus package as data showed rising numbers of coronavirus cases.
Market moves
The official confirmation on Wednesday that PayPal was penetrating cryptocurrencies (reported months ago by CoinDesk's Ian Allison) triggered a new price hike for Bitcoin, which is already considered one of the world's best performing asset classes this year.
And it could be the fear of missing out or FOMO that is driving Bitcoin prices even higher now.
"Big moves can trigger periods of pure FOMO," wrote Matt Blom, sales and trading director of listed cryptocurrency financial firm Diginex, on Thursday. "Demanding dealers are definitely aware of the opportunity."
Related: PayPal's move is good for crypto adoption but not so much for profits: Morgan Stanley
The FOMO instinct could be especially strong as the coronavirus-infected economy puts Wall Street stock and bond traders in hopes of trillion-dollar stimulus packages just to keep asset prices from falling.
"Prices on markets are pretty aggressive," George Pearkes, global macro strategist at Bespoke Investment Group, told Bloomberg News.
Bitcoin appears to be bouncing off new economic announcements as many cryptocurrency investors view it as a hedge against inflation. However, digital assets also benefit from doubt as a new technology that could revolutionize the financial industry or as a means of payment that could be adopted from Argentina to Nigeria.
"This merger of Fintech and Bitcoin is another positive development for investors," Zac Prince, CEO of crypto lender BlockFi, told CoinDesk in an email.
With just a few months left in 2020, the largest cryptocurrency is well on its way to outperform almost every other major traditional asset class, from stocks to bonds to gold. It would be the second year in a row.
Bitcoin prices, which doubled in 2019, have increased 80% so far this year. That equates to 6.3% for the Standard & Poor's 500 index of large US stocks and a 27% increase for gold.
PayPal's announcement and subsequent Bitcoin rally were inked by major financial publications such as Bloomberg News, the Financial Times and MarketWatch.
"It's the extent of PayPal's reach that makes the headlines," wrote Jason Deane, an analyst with forex and cryptocurrency research firm Quantum Economics, in a report. "This could well go down in history as the turning point when Bitcoin becomes mainstream."
Such speculation could only be hype, pure folly, a bubble mentality. Or it could be inevitable. Or all of the above.
- Bradley Keoun
Bitcoin Watch
Bitcoin's price rally seems excessive, according to technical indicators. However, these metrics often catch investors on the wrong side of the market and are unreliable.
The cryptocurrency rose to a 15-month high of over $ 13,200 on Wednesday after online payments giant PayPal added support for Bitcoin and other cryptocurrencies. At press time, Bitcoin is trading near $ 13,000 for a monthly gain of 20%.
The 14-day Relative Strength Index (RSI) is now above 70, indicating overbought conditions. The RSIs on the 4-hour and hourly charts also show that the price rally is exaggerated.
However, other measures show that recent price levels may hold.
Data extracted from the Bitcoin blockchain shows an increase in inflows to cryptocurrency exchanges, which is usually a sign that sellers are lining up to sell. According to blockchain intelligence agency Chainalysis, Chainalysis received a total of 106,519 BTC on Wednesday, the highest daily inflow since October 2nd.
Nevertheless, the prices hold up and signal that interested buyers are also making a strong bid. It's not unprecedented: a similar spike in inflows was seen on September 4th, but the cryptocurrency rose to 15-month highs.
All in all, the price rally is likely to continue.
- Omkar Godbole
Read More: Over $ 13,000: Bitcoin Unimpressed By Income Employees After Soaring To 2020 High
Token clock
Zcash (ZEC): The partnership between the Tokenizer Tokensoft and the Anchorage custodian results in packaged Zcash (WZEC) that can be used on the Ethereum blockchain and deployed in DeFi protocols.
Ethereum Classic (ETC): Several 51% attacks on the network have resulted in the latest fix called MESS, but critics say that is not enough.
Litecoin (LTC): PayPal's decision to support Litecoin on its platform may be at odds with the community, but it has helped increase its value over the past 24 hours.
What is hot?
Digital asset broker Voyager Digital agrees to buy the French crypto exchange LGO, will spend 1 million shares (currently around 50 cents each) on the acquisition and carry out a token merger (CoinDesk).
The DeFi platform for income farming Harvest Finance doubles the total value of the collateral in one week to 704 million USD, which shuts down the decentralized futures exchange Synthetix (CoinDesk).
Popular exchange of cryptocurrency options At Deribit, all users must be checked for their ID before the end of the year (CoinDesk).
Kraken crypto exchange officially resumes trading for Japanese customers (CoinDesk)
The US regulatory authority for commodity markets advises brokers on maintaining the digital currencies of users in separate accounts that are part of the "holistic framework" (CoinDesk).
Peer-to-peer trading volume for Nigerian Bitcoin is growing amid mounting tensions over alleged police corruption as locals look for easy ways to send remittances and protect savings from the local inflationary currency (CoinDesk):
Analogues
The latest on economics and traditional finance
More than 5,000 downsizing at Hong Kong airline Cathay has shaken local real estate market (Bloomberg)
According to Goldman Sachs (CNBC), the US stimulus package is unlikely to be passed before the November 3rd election.
The mere prospect that the Federal Reserve could intervene in the bond markets will keep US Treasury bond yields close to all-time lows (Bloomberg).
More than half of all small and medium-sized enterprises in Europe fear for their survival in the next 12 months (Reuters)
Alibaba to buy more than a fifth of potential $ 35 billion IPO of fintech giant Ant Group (Bloomberg)
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First mover: The FOMO takes over as the PayPal game pushes the Bitcoin rally to $ 13,000
First mover: The FOMO takes over as the PayPal game pushes the Bitcoin rally to $ 13,000

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