08/28 update below. This post was originally published on August 26
TSLA billionaire and X owner Elon Musk has a habit of causing wild swings for the bitcoin price and other major cryptocurrencies (with Musk lobbing a grenade into the crypto market earlier this month).
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The bitcoin price has swung wildly over the last few months as economic and regulatory pressures mount—though traders are now braced for a $15.5 trillion September Wall Street earthquake.
Now, after a U.S. Securities and Exchange Commission (SEC) insider has warned bitcoin and crypto buyers to beware of Binance, a leak has suggested Musk could turn X (Twitter) into an “updated version of PayPal
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Musk “continues to have conversations [with] top Wall Street executives on [the] future of X,” Fox Business Network correspondent Charles Gasparino, posted to X.
“Seems to be settling, they tell me, on a new-fangled payment system, [an] updated version of PayPal. It will offer low transaction costs (as opposed to credit cards) and monetize user info.”
Earlier this month, media reports denied by Musk suggested X could add a trading platform built inside the app as part of a plan to turn the app into a financial-data giant, with Musk going on to say X will never launch a cryptocurrency of its own to rival bitcoin, ethereum, XRP
XRP or Musk’s “fave” cryptocurrency dogecoin.
PayPal, the payments giant Musk’s X.com created when it merged with Confinity in March 2000, earlier this month launched a U.S. dollar-pegged stablecoin PYUSD, hoping to succeed where Meta, then Facebook, failed with its own libra-turned-diem stablecoin.
08/28 update: Despite the hype surrounding PayPal’s new stablecoin, very few people are using and holding PYUSD in self-custody wallets, according to analysts at crypto data company Nansen—something that could dent enthusiasm for X following in PayPal’s footsteps on Wall Street.
“On the surface, there’s a lack of demand from crypto users for PYUSD when other alternatives exist,” Nansen researchers wrote in a report, adding this “might be due to PayPal targeting a different demographic.”
Nansen pointed to on-chain data that showed some 90% of PYUSD is currently held in wallets controlled by the PYUSD issuer Paxos, with holdings on crypto exchanges accounting for 7% of the total supply and only 3% held by traders.
PayPal’s support for bitcoin and crypto in late 2020 helped kick off the latest bitcoin price bull run that catapulted bitcoin to almost $70,000.
“We saw PayPal introduce its stablecoin—that also acts as a stamp of approval,” Gavin Michael, the chief executive of Intercontinental Exchange-owned bitcoin custody company Bakkt, said in emailed comments.
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Michael called BlackRock’s plans to create a long-awaited U.S. spot bitcoin exchange-traded fund (ETF) a “stamp of approval,” as well. BlackRock, the world’s largest asset manager, triggered a resurgence of Wall Street interest in bitcoin and crypto when it filed for a spot bitcoin ETF in June.
“We’re starting to see people settling transactions over stablecoins, whether they’re minted on a private or public blockchain and we like that as well because what it’s starting to show is that the technology itself is making conventional financial services better,” Michael said.
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