Bitcoin Roars Past $34,000 for the First Time; PayPal & BitGo Acquisition Talks Fall Apart; XRP’s Market Cap Fell 60% after SEC Lawsuit

Hey ?? Blockchain & Cryptocurrency enthusiasts! Trust you had a wonderful week. This is the best Weekly Blockchain & Crypto Digest thus far. Enjoy!

P.S. Before we dive into what happened in Blockchain & Crypto last week, check out my Connecting the Dots Newsletter, where you will get much more. Every Week (the newest edition is coming out tomorrow)????

Last week (28 December - 2 January) was obviously not that intense yet still an interesting one in Blockchain & Cryptocurrency space this year. Bitcoin has smashed past another all-time-high, crossing past $34,000 for the first time ever. PayPal and BitGo acquisition talks fell apart, XRP has lost nearly 60% of market cap after the SEC lawsuit, and other interesting developments.

Without further ado, let us dive into what has happened in the financial technology sector this week. Let’s connect the dots.

Bitcoin Roars Past $34,000 for the First Time

The price of the most popular cryptocurrency surged past $34,000 for the first time ever early Sunday morning, extending a record-setting holiday rally. 

2021 started wildly - the biggest and most popular cryptocurrency rose more than 300%, with an almost 50% gain in December alone. It’s interesting to note that on November 30, Bitcoin has smashed a nearly 3-year-old high of $19,793.

By the end of 2020, the cryptocurrency had risen about $10,000. At the point of writing, BTC is changing hands close to $34,000.

What’s clear though is that institutions are driving up the demand and there’s simply not enough Bitcoin.

THE TAKEAWAY

Bitcoin is the new digital gold, and everyone wants it. With a claim to preserve their wealth, institutions are allocating Bitcoin in their portfolios. Some of the recent ones that jumped on board: Anthony Scaramucci’s Skybridge Capital ($182 million in December); insurance giant MassMutual ($100 million in December); and Guggenheim Investments (up to 10% of its $5 billion macro fund).

PayPal & BitGo Acquisition Talks Fall Apart

PayPal has dropped its bid to acquire Bitcoin wallet provider BitGo but remains interested in investing in the cryptocurrency space, according to Fortune. 

Rumors that PayPal is interested in acquiring BitGo became public in October, though neither company would confirm they were holding talks.

If come to fruition, the deal could have helped PayPal grow in the digital coin space, especially given the fact that PayPal should start allowing customers to transact in cryptocurrencies in early 2021.

BitGo is one of the early big players in cryptocurrency, primarily focusing on institutions and wealthy individuals. The company is reported to be holding cryptocurrency worth $16 billion for customers.

THE TAKEAWAY

PayPal’s move into the cryptocurrency space marked the start of more mainstream crypto adoption. Given its size and influence, it could potentially become one of the biggest players in the ring very soon. BitGo might be too big and too much focused on institutions, but it seems to be very likely that PayPal’s M&A team is looking at other potential targets as we speak.

XRP’s Market Cap Fell 60% after SEC Lawsuit

The SEC's lawsuit against Ripple cut nearly $16 billion off of the market cap of XRP.

XRP's (the propriety cryptocurrency of Ripple) market cap has fallen by nearly $16 billion, or 60%, since news of the US Securities and Exchange Commission’s lawsuit against Ripple Labs came to light on December 21. 

The SEC's lawsuit alleges that Ripple Labs has raised $1.3 billion in unregistered securities since 2013 by selling XRP to investors, including those in the US.

As an effect, crypto exchanges started suspended trading while crypto funds liquidated assets. Beaxy was the first exchange to delist the coin. It was latest joined by Bitstamp, Coinbase, OKCoin, among others. Galaxy Digital, Jump Trading, Bitwise, CrossTower, and OSL had made similar announcements too.

THE TAKEAWAY

SEC vs. Ripple - a billion-dollar battle. This is one of the most compelling and rather questionable legal actions happening in the crypto space right now, which will definitely set a president for the future. It will be thus interesting to see whether Ripple can come out of this stranger or it’s the beginning of the end.

Extra Reads & Quick Bites for Curious Minds??:

• Anthony Scaramucci's Skybridge has invested $182M into Bitcoin, according to the deck.
• FinCEN, a bureau of the US Treasury, has proposed requiring banks and money service businesses to record transactions to private cryptocurrency wallets.

Quote of the Week/??Food for Thought??

XRP is going silent.

Graph of the Week

78% of the circulating Bitcoin supply is illiquid and hence barely accessible for buying.

Week in Brief

The price of the most popular cryptocurrency surged past $34,000 for the first time ever early Sunday morning, extending a record-setting holiday rally. 

PayPal has dropped its bid to acquire Bitcoin wallet provider BitGo but remains interested in investing in the cryptocurrency space, according to Fortune.

The SEC's lawsuit against Ripple cut nearly $16 billion off of the market cap of XRP.

Continue reading by subscribing to Connecting the Dots Newsletter. You will receive fresh news about Blockchain & Cryptocurrency with hot takeaways every week (the newest edition coming out tomorrow!).

P.S. You might enjoy my earlier pieces as well:

?? These are the Best Performing Stocks of the Last Decade

?? Welcome to the Google Bank - Your Everyday Banking from Google, NOT a Bank.

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About: I am a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading the company's expansion into Europe, I'm an active member of the FinTech community and a TechFin evangelist.

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