Bitcoin has grown thanks to demand from private investors

The emergence of new opportunities for retail investors to buy bitcoin has led to an explosion in demand, says Dan Morehead. According to the head of Pantera Capital, only PayPal users buy more coins than miners mine.

The head of Pantera Capital referred to a recent report from the company, which highlights the future of bitcoin price through the prism of supply and demand.

“We've had two huge shifts in the last seven months - in supply and demand - both towards higher prices.”

The rise in demand in the report is attributed to the involvement of payment companies such as PayPal and Square in the crypto industry. The availability of buying cryptocurrencies raises the demand curve. At the same time, bitcoin emissions have halved since the halving in May.

Data: Bitcoin Demand report = 3x Supply / Pantera Capital.

A reduction in supply (S -> S halving) with an increase in demand (D -> D PayPal) naturally leads to an increase in the price of an asset.

“We called our previous letter to investors 'Bitcoin Deficit'. And the price is now behaving according to the deficit”, writes Morehead.

The report states that the number of active Bitcoin users is constantly growing. Moving from 10,000 to 100,000 users, the price increased and became less volatile.

“The price went up as a million people owned bitcoins. Every couple of years, the number of people using Bitcoin is growing by an order of magnitude. So is the price."

Data: Bitcoin Demand report = 3x Supply / Pantera Capital.

Morehead proposes to imagine how much the price will rise with the daily use of bitcoin by billions of users. The reason for Pantera Capital's optimism is the participation of PayPal and the number of users of the payment system.

Blockstream co-founder and CEO Adam Back echoes Morehead's views:
“So $25k* on 25th, three new ATHs $24.7, $24.8 and $25k in a day. You think institutions did that? On Christmas day? Retail did it - only people near a keyboard.

(*$25k if you pick @bitstamp or @krakenfx tho not quite on @bitfinex)”

We will remind, on November 12, the payment company PayPal announced the opening of access to bitcoin and several altcoins for its American customers.

On February 2, it became known from a survey that 65% of customers of the PayPal payment company are ready to pay with bitcoin for goods and services.
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