In a recent investor letter, cryptocurrency and blockchain investment firm Pantera Capital claimed PayPal’s foray into cryptocurrency may be driving the current bitcoin rally. Bitcoin prices hit a three-year high last week.

Why should we care?
Since October, PayPal users have been able to purchase, hold, and sell bitcoin and other cryptocurrencies using their Paypal accounts, removing friction involved in buying the cryptocurrency. “When PayPal went live, volume started exploding,” the Pantera letter said, claiming that PayPal is buying 70% of the new supply of bitcoins. Together with bitcoins purchased through Square's Cash App, all newly minted bitcoins are accounted for, Pantera suggested. The current bitcoin rally, Pantera argued, is more sustainable than earlier ones because established players have made purchasing bitcoin more accessible. In an interview on Monday, Nov. 23, PayPal CEO Dan Schulman said crypto use cases will only expand, making them widely accepted, more stable, and probably more valuable over time.