The price of bitcoin has risen to three-month highs of more than $50,000 as PayPal announced it would allow its British users to trade cryptocurrencies from this week.
Bitcoin, the leading cryptocurrency, peaked at almost $65,000 in April before falling back to less than $30,000 amid fears of a crackdown on digital assets by China. It has recovered to trade above $50,000 for the first time since May on renewed optimism that cryptocurrencies will be more widely adopted.
The latest rally coincided with PayPal announcing that it would allow users in the UK to buy, sell and hold cryptocurrencies through its platform. Customers will be able to trade ethereum, bitcoin or bitcoin cash, with a minimum purchase of £1.
Describing itself as a “trusted brand”, PayPal said its move would mean that “access, knowledge and the exploration of cryptocurrency has the potential to become mainstream in the UK”.
It comes despite the Financial Conduct Authority warning this year that investors in digital currencies were at “high risk of losses” and should “be prepared to lose all their money”. Concerns over cryptocurrencies remain, including lax regulation and the dangers of retail investors losing money, with the FCA noting that digital currencies “have no inherent value”.
Bitcoin was trading up 3 per cent yesterday morning at $50,191 and other cryptocurrencies including ethereum and dogecoin also advanced.
Created in 2008 as strings of computer code with no physical form, bitcoin was intended as an alternative means of paying for goods and services but has primarily been used for speculative trading to date. Its rally to record highs earlier this year was aided by the disclosure in February that Tesla had invested $1.5 billion in it. There has also been speculation over Amazon exploring cryptocurrencies.
PayPal, founded in 1998, is a leading online payments platform with more than 400 million consumers and sellers. It became one of the biggest companies to embrace digital currencies late last year when it enabled customers in America to buy, hold or sell cryptocurrencies directly from their PayPal accounts. This year it began enabling US customers to make purchases using their cryptocurrency holdings.
PayPal’s new UK service is its first international expansion of the cryptocurrency offering. It is initially focused on trading and the company has not confirmed if or when it will allow customers to spend their crypto holdings. It said they would be able to view real-time prices through its website or app.
Jose Fernandez da Ponte, vice-president and general manager for blockchain, crypto and digital currencies at PayPal, told CNBC: “We are very deliberate about starting with initial functionality and then we’ll see where the market is going to take us.”
As in the US, PayPal’s UK cryptocurrency offering will be run in partnership with Paxos, an American cryptocurrency brokerage.
Da Ponte said: “We are committed to continue working closely with regulators in the UK and around the world to offer our support — and meaningfully contribute to shaping the role digital currencies will play in the future of global finance and commerce.”
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PayPal backs crypto trades as bitcoin stages a recovery