Together with Square’s Cash App, the two companies are buying more than 100% of all newly issued virgin bitcoin (BTC), it says.
Paypal bought up to 70% of all the newly mined bitcoin since the payments giant started offering cryptocurrency services four weeks ago.
Pantera Capital says the shortage of bitcoin resulting from high corporate demand means that the likes of Cash App, which recently reported a record $1.6 billion bitcoin revenue, will have to pay more for each coin.
The letter also argues that bitcoin’s current rally is much more “sustainable” than 2017’s because of rising institutional demand from entities such as Paypal, Cash App, and Robinhood, which make buying bitcoin easy.
Bitcoin prices rose alongside the Paypal news, breaching $12,000 at the time the service was announced, and has maintained the bullish momentum ever since, hitting a three-year high of $18,997 on Nov. 20.