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Bitcoin Breaks £10,0000 Mark After PayPal Announcement

Author: Jon Clarke - Bullion & Economics Editor

Published: 27 Oct 2020

Last Updated: 27 Oct 2020

Synopsis

The news that customers can buy and sell Bitcoin through the PayPal network sent the virtual coin’s price to a weekly high of £10,076.04. While many crypto advocates are praising the achievement, others are not convinced.

credit: pixabay

Paypal Now Accepting Bitcoin

According to the payment giant, PayPal customers now have the option to trade and hold bitcoin and other cryptocurrencies through their online wallets. PayPal also confirmed that by early 2021, customers will be able to use digital currencies with the 26 million merchants in its network.

The news of PayPal's announcement is a long-awaited mainstream endorsement of cryptocurrency which comes as more and more financial institutions have been buying up more digital assets.

Bitcoin Price Rise

The announcement led to a near thirteen and a half percent price rise through the week, with a high of £10,076.04. This is still a long way off the 2017 spike which reached over £13,000 only to drop to around £2,000 over the following 12 months.

While the rally is a welcome sight to many crypto investors, not everyone is as impressed with some of the finer details of the arrangement.

Withdrawal Restrictions and Taxes

Some bitcoin users have expressed concern over PayPal's decision to disallow the transferal of funds to other accounts. While they can be purchased and placed in the PayPal virtual wallet, users cannot transfer these coins to their own private wallets. One critic described this as a “closed platform for speculation”.

Other proponents point to the tax implications of spending Bitcoin from PayPal accounts. According to Shehan Chandrasekera of Cointracker, as PayPal converts the crypto balance to fiat, every purchase becomes “a taxable obligation for the consumer”.

Mainstream acceptance is certainly welcomed by the crypto community, but PayPal’s set up seem to go against the decentralised nature of digital currency. So, while the price has increased so dramatically, it would be worthwhile for users to consider the broader implications. 

Further Reading

You might like to read our precious metals and coin news articles.

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