Bitcoin in Brief Wednesday: McAfee Predicts Bull Run as Crypto Markets Dip

In today’s Bitcoin in Brief, internet security expert John McAfee expects bulls to come back to the crypto market, despite recent drops in prices across the board. Billions will be pumped by institutional investors, he predicted in a tweet. Meanwhile, a new study has shown that the mood of investors, rather than economic indicators, actually determines the value of cryptocurrencies. Also, do you want to know when Paypal will support crypto payments?

Also read: Bitcoin in Brief Tuesday: Crypto Revolution Starts Reshaping Global Politics

Institutional Investors to Pump Billions in Crypto

John McAfee expects a bull run on cryptocurrency markets in the near future. Billions will be pumped by institutional investors, the internet security expert predicted in a post on the microblogging platform Twitter this week. McAfee claims this will lead to significant changes in the market capitalizations of the leading cryptocurrencies, but also those of most altcoins.

“Institutional investors are preparing to enter the cryptocurrency market with a vengeance,” McAfee said in his tweet. He explained that they are generally long term investors that will spend billions on the market. “Expect the top ten coins to go through the roof fairly quickly. The bulk of altcoins will soon follow,” the software guru wrote. Admitting he had no more information than his followers, John McAfee advised them to check the recent news and use their heads.

McAfee was probably referring to several recent announcements indicating possible developments in that direction. Earlier this month, reports suggested that Goldman Sachs is going to launch a bitcoin trading operation to buy and sell bitcoin futures on behalf of institutional clients. More recently, US crypto exchange Coinbase announced new services meant to attract big money players such as crypto hedge funds. The plans include the launch of a crypto custodian service and a suite of tools specifically designed for institutions called Coinbase Prime. The San Francisco-based company has also discussed with regulators the possibility to apply for a banking license.

However, McAfee’s optimistic prognosis coincides with the return of the bears to the cryptocurrency market. The price of bitcoin (BTC) has just dropped below the $8,000 mark, hitting a month’s low. Bitcoin Cash (BCH) is currently trading at over $1,000 (at the time of writing). John McAfee has previously predicted that the price of bitcoin will reach $1 million USD by the end of 2020.

Study: Investors’ Mood Determines the Value of Cryptocurrencies

According to a new study published by Warwick Business School, the value of cryptocurrencies is determined primarily by the mood of investors and not so much by economic factors or indicators. Assistant professor of finance Daniele Bianchi has found that the price patterns of the 14 largest cryptocurrencies reflect past returns of investors, combined with the hype and emotion experienced as they watch the value climb or fall. The research is titled “Cryptocurrencies as an Asset Class: An Empirical Assessment,” the Independent reports.

According to the author, this behavior can be attributed to the fact that bitcoin and other cryptocurrencies fall outside the remit of governments or financial institutions. Investing in digital currencies is therefore more similar to buying equity in a high-tech firm rather than a normal currency, he notes. Bianchi also points out that the study shows limited similarities between bitcoin and gold. At the same time, because of the high volatility of the prices of the biggest cryptocurrencies, they can hardly be seen as a reliable savings instrument.

CFO: If Bitcoin Gets ‘Better’, Paypal Will Support It

John Rainey, the Chief Financial Officer of Paypal, has stated in a recent interview that the payment platform will proceed with a bit more caution towards cryptocurrencies. At the same time, he admitted that if cryptocurrency stabilizes in the future and becomes “better currency”, his company will “certainly support that”. Rainey added that the volatile crypto swings threaten the viability of the businesses Paypal is working with.

“If you’re a merchant and you have, let’s say, a 10 percent margin on a product that you sell and you accept bitcoin, for example, and the very next day it moves 15 percent, you’re now underwater on that transaction,” Paypal CFO told CNBC. “You could have something that appeals to consumers, but if merchants don’t accept it, it’s of little value. Right now, we don’t see a lot of interest from our merchants. But if it’s something that stabilizes in the future and is a better currency, then we’ll certainly support that,” Rainey elaborated.

Despite Paypal’s current position on cryptocurrencies, a recent patent filing revealed that the payment provider might be considering expanding its exposure to the crypto ecosystem. Reports came out in March this year that Paypal has filed a new patent application with the US Patent and Trademark Office for an “expedited virtual currency transaction system”. Back in 2016, it was reported that the company had applied for another crypto-related patent – one that envisages the development of a payment module accepting bitcoin, litecoin and dogecoin.

What are your thoughts on today’s topics in Bitcoin in Brief? Let us know in the comments section below.

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