PayPal has seen a drop in its cryptocurrency holdings in the third quarter. This change hints at a shift in market dynamics that might be boosting Bitcoin's recent rise to $72,000.
The company reported a nearly 11% decrease in the value of its crypto assets, bringing the total to around $2.17 billion. This information comes from a filing with the U.S. Securities and Exchange Commission.
Interestingly, even though Bitcoin's price jumped 8% from June 30 to September 30, the dollar value of Bitcoin held by PayPal actually fell by 1%. Ether didn’t fare much better; its value dropped 27%, which is more than the 22% decline in its price during the same period.
In addition to Bitcoin and Ether, PayPal allows customers to buy and sell Bitcoin Cash, Litecoin, and its own stablecoin, PayPal USD. All of these also saw a decrease in value.
On the institutional side, demand for Bitcoin is rising. According to Ki Young Ju, the founder and CEO of CryptoQuant, less than half of the Bitcoin entering U.S. spot exchange-traded funds (ETFs) flows into large wallets that hold more than 1,000 Bitcoins. In fact, institutional demand in custodial wallets is about 670,000 Bitcoins, compared to 278,000 for retail investors.
Since the launch of U.S. spot Bitcoin ETFs in January, nearly $23.3 billion has been invested in these products. They allow traditional investors to gain exposure to Bitcoin through their brokerage accounts. The number of institutional investors in Bitcoin ETFs grew by 14% from the first to the second quarter this year.
However, retail interest in cryptocurrency seems to be fading. Google Trends data shows that searches for "Bitcoin" in October are down 82% from their peak in December 2017. We’ll get a clearer picture of retail interest when Robinhood and Coinbase release their quarterly reports, detailing changes in crypto transaction volumes on their platforms.
In the broader crypto market, Bitcoin has risen 1.7% in the last 24 hours, trading at $72,139. Ethereum has also seen an increase of 2.1%, trading at $2,667.