opinion

Crypto SWOT: PayPal Holdings will now permit merchants to buy, hold and sell cryptocurrency from their business accounts

Kitco Media
By Frank E Holmes
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Strengths

  • Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was Shiba Inu, rising 48.17%.
  • Bitcoin jumped past $64,000 after the Federal Reserve kicked off an anticipated cycle of monetary easing, reports Bloomberg, with an aggressive 50 basis-point reduction in interest rates. The rally in Bitcoin has prompted a test of the 200-day moving average.

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  • Bitcoin had a significant run this week, for the first time in four weeks, before the expiration of options contracts on Friday, reports Bloomberg. Some analysts believe this could result in heightened volatility in the cryptocurrency market.

Weaknesses

  • Of the cryptocurrencies tracked by CoinMarketCap, the worst performer for the week was Monero, down 7.58%.
  • Ether exchange-traded funds (ETFs) recorded their largest outflows since July with over $79 million exiting Monday in a sign of waning institutional demand for the world’s largest token. Those figures are the highest since July 29, writes Bloomberg. 
  • Dubai is adopting stricter rules around marketing crypto investments, reports Bloomberg. Dubai’s crypto regulator updated its marketing guidelines for virtual assets, with the new rules requiring firms to include a disclaimer clarifying the risks of such investments. As of October 1, companies looking to market virtual assets in the UAE will have to include a prominent disclaimer stating that virtual assets may lose their value in full or in part, the article explains.

Opportunities

  • China’s over-the-counter cryptocurrency brokers are attracting unprecedented inflows, reflecting a hunger for alternative investments amid a weak equity and property market in a struggling economy. As reported by Bloomberg, inflows topped $20 billion in each of the three quarters through June. 
  • PayPal Holdings will now permit merchants to buy, hold and sell cryptocurrency from their business accounts, expanding on the payment firm’s already-available consumer offerings. PayPal has allowed consumers to buy, hold and sell digital crypto via their PayPal and Venmo accounts since 2020, writes Bloomberg. 
  • Bitcoin is on course for one of its biggest September gains as a global wave of interest-rate cuts by the U.S. Federal Reserve helps the largest digital asset to buck a seasonal jinx, Bloomberg reports. Bitcoin is up over 10% this month, contrasting with an average 5.9% decline in September.

Threats

  • Caroline Ellison was sentenced to 24 months in prison by a federal judge for her role in the FTX collapse, Bloomberg reports, despite helping prosecutors in the conviction of Sam Bankman-Fried. Judge Kaplan praised her testimony and cooperation as remarkable but noted that this was one of the most serious financial fraud crimes ever committed and that her cooperation can’t be a “get out of jail free card.”
  • Whoever was behind India’s biggest cryptocurrency hack is almost done laundering over $230 million worth of tokens. The hacker behind the WazirX hack was nearly finished laundering the stolen funds, using Tornado Cash to obscure the transactions, according to Bloomberg. 
  • The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned two virtual Russian crypto exchanges, PM2BTC and Cryptex, as well as their beneficiary Sergein Ivanov. The Treasury’s Financial Crimes Enforcement Network (FinCEN) also issued an order that identifies PM2BTC and Cryptex as being of “primary money laundering concern” in connection with Russian illicit finance, writes Bloomberg.
Kitco Media

Frank E Holmes

Frank Holmes is CEO and chief investment officer of U.S. Global Investors, Inc., a boutique investment advisory firm based in San Antonio that manages domestic and offshore funds specializing in the natural resources and emerging markets sectors. The company’s no-load mutual funds include the Global Resources Fund (ticker PSPFX), the World Precious Minerals Fund (UNWPX) and the Gold Shares Fund (USERX).

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