As soon as COVID-19 hit the globe, social distancing mandates and fears that notes may be carriers of the virus made the concept of digital currency popular. Be it corporations or central banks – all are mulling over the greater acceptance of cryptocurrencies.
Notably, bitcoin is up about 80% this year as cryptocurrencies are drawing considerable attention this year. Bitcoin crossed the mark of $12,000 lately and marked its
highest level since July 2019 on Oct 21. Corporations’ Greater Acceptance
On Oct 21,
PayPal Holdings Inc ( PYPL Quick Quote PYPL - Free Report) announced that it will allow customers to hold bitcoin and other virtual coins in its online wallet and shop using cryptocurrencies at the 26 million merchants on its network. The new service makes PayPal one of the largest U.S. companies to provide consumers access to cryptocurrencies.
This is great news for bitcoin and rival cryptocurrencies. Bitcoin jumped about 7% on Oct 21 on the PayPal news. PayPal competitor
Square ( SQ Quick Quote SQ - Free Report) launched support for bitcoin back in 2018 through its Cash app. Square also bought $50 million in bitcoin this month as part of larger investment in cryptocurrency.
However, PayPal is broadening the area by supporting bitcoin, Ethereum, Bitcoin Cash, and Litecoin. PayPal also plans to extend support to its money-sending subsidiary Venmo and international markets starting in the first half of 2021.
For now, the plan is only to support
U.S. users. Notably, U.S. account holders will be able to buy, sell and hold cryptocurrencies in their PayPal wallets over the coming weeks, the company said, as quoted on Reuters. Other companies those accept bitcoins include Microsoft ( MSFT Quick Quote MSFT - Free Report) , AT&T ( T Quick Quote T - Free Report) , Dish Network (DISH) Burger King, Domino’s Pizza ( DPZ Quick Quote DPZ - Free Report) , Goldman Sachs (GS), Intuit Inc. (INTU), American online retailer Overstock, Shopify (SHOP), Virgin Galactic (SPCE), Zynga (ZNGA) and Etsy (ETSY) among others. Central Bank Digital Currency (CBDC) Concept Spreading
Several central banks are considering the rollout of CBDCs lately. China has been taking serious moves toward no-touch payments. In efforts to match with China, seven major central banks last week set the key principles for issuing CBDCs, per Reuters. China's recent experimental $1.5 million (1.16 million pounds) giveaway of
digital yuan to Shenzhen citizens received kudos from currency analysts.
Sweden’s Central Bank, Riksbank is also conducting a pilot project with Accenture to
prepare e-krona. The European Central Bank (ECB) is mulling over the rollout of a "digital euro" for the 19-nation currency club. The ECB launched a public consultation on a potential digital euro on Oct 12. In its 2020-2024 strategic plan, the Bank of Spain also said that it will focus on design proposals for a central bank digital currency.
On Oct 19, Jerome Powell, Chairman of the Board of Governors of the U.S. Federal Reserve, said that the Fed is committed to considering a CBDC but made no final call on it. The Fed wants “to
get it right than be first,” said Jerome Powell. “One set of experiments is being carried out at the board of governors here in Washington, D.C.,” Powell said. How to Invest in the Recent Rise of Cryptocurrencies?
Investors can choose to invest in options like blockchain ETFs. Per
a source, “the blockchain in Bitcoin literally acts [as] a ledger; it keeps track of the balances for all users and updates them as money changes hands.” “Invented to host bitcoin, today many other cryptocurrencies are also based on blockchain technology.”
So, since investors cannot lay their hands on a digital currency ETF now, they can definitely familiarize with the concept through blockchain ETFs like
Reality Shares Nasdaq NexGen Economy ETF ( BLCN Quick Quote BLCN - Free Report) , Amplify Transformational Data Sharing ETF ( BLOK Quick Quote BLOK - Free Report) and First Trust Indxx Innovative Transaction & Process ETF ( LEGR Quick Quote LEGR - Free Report) .
Also, ETFs offering exposure to the blockchain ecosystem via semiconductor companies that make chips for bitcoin mining (or could make for some potential CBDCs) can be played. The most-popular funds include
iShares PHLX Semiconductor ETF (and SOXX Quick Quote SOXX - Free Report) VanEck Vectors Semiconductor ETF ( SMH Quick Quote SMH - Free Report) .
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