Category: Crypto News

In the twelve years since Bitcoin’s creation by an anonymous entity, the underlying network has become a global payment settlement layer, putting it in the same bracket as older financial services companies such as PayPal, Mastercard and Visa. 

Impressively, recent data comparisons shared by Block Data revealed that Bitcoin has handled more than 50% of PayPal’s average in 2021, although it still trails Visa and Mastercard by some mile. This year, PayPal processed an average of $310 billion worth of transactions each quarter.

Meanwhile, the bitcoin network recorded an average of $489 billion in every quarter of 2021 so far.

Worth noting is that Bitcoin’s stellar price increase since the turn of the year has contributed immensely to the latest feat. At the same time, it would take significant growth for Bitcoin to reach the same volume as Visa and Mastercard. BlockData estimates that by taking “the average yearly bitcoin price as a growth metric, it could take as long as 2060 for this to happen.”

Payment Giants Tapping Into Bitcoin and Crypto Growth

It is worth noting though that PayPal recorded a stellar financial report in the last quarter of 2020 only after the firm decided to venture into cryptocurrency. The payments giant now offers crypto buy and sell services to clients in the U.S. and the UK.

Visa and Mastercard have also not been left behind, with both companies launching crypto-related efforts in recent times. It is apparent that their involvement would be critical to pushing cryptocurrencies further towards mainstream adoption.

Another category of payment institutions tapping into bitcoin’s growth are banks. In a recent development, it was revealed that Five Star Bank and UNIFY Credit Union had entered into a partnership to offer bitcoin to customers.

With the industry around digital assets like Bitcoin continuing to grow in size, the odds of sovereign countries adopting it for their foreign reserves continue to rise.

In a recent interview with local news agency Interfax, Alexander Pankin, the Deputy Minister for the Russian Federation, revealed that the country is looking at the possibility of adopting digital assets as a replacement for the U.S. dollar in its foreign reserves.

According to Pankin, adopting a digital currency as a foreign exchange reserve will serve as a  preventive step towards providing a stable ecosystem for the country’s  development, he stated; “it is possible to replace the American dollar with other currencies, both national and regional, and in the future, probably, with some kind of digital assets.”

Russia Asserts Supremacy of Digital Assets

While the Deputy Minister did not specify which digital currency the country would adopt, he emphasized that removing the dollar for a digital currency would be a way of preserving Russia’s financial sovereignty.

Unlike the US dollar, cryptocurrencies like Bitcoin are decentralized and not censored by a single country, a feature that makes it appealing to sovereign states. Bitcoin currently has a market capitalization above $1 trillion and will probably be a top contender if Russia decides to go down that path.

Notably, Pankin pointed out a key advantage of decentralized currencies in protecting transaction settlements with foreign business partners when he said; 

“payments in US dollars, in fact, go through American banks and the clearing system, which allows Washington to block any, in their opinion, suspicious transactions.”

If and when Russia does adopt cryptocurrencies like Bitcoin for its reserves, the European nation would be taking the same footsteps as El Salvador. The country of six million people became famous for being the first to adopt Bitcoin for its reserves and as a legal tender.

Meanwhile, the Bank of Russia is reportedly considering the issuance of a Central Bank Digital Currency (CBDC) called the digital ruble.

In a recent Twitter post made by a Bitcoin OG, Peter Rizzo, he recalls an early effort by bitcoin investors on this day seven years ago. The small but mighty army of bitcoin enthusiasts put in a lot of buy orders to steady the price of bitcoin at $300 after a notorious BearWhale tried to sell 30,000 BTC worth around $9 million at the time.

The Infamous Bitcoin Bearwhale Story

In 2014, very few people owned bitcoin. In that year in contrast to the present, there were still a lot of doubts and speculations on whether the currency was even worth buying despite how cheap it was.

A few people, though, had faith in bitcoin and bought some for themselves. When the price spiked to $1000+,  the holders were happy and refused to sell, hoping that the price would keep increasing.

But then the price started sinking suddenly and some holders started panicking, one of which was a man who owned 30,00 bitcoins which he had formerly bought for $8 per coin. Given that he had a large amount and was bearish on price, he earned the nickname, BearWhale.

When the price finally dropped as low as $300 per coin, BearWhale could not take it anymore. As a result, he decided to sell all the 30,000 bitcoins he had, basing his reason on some lies that were spread about Bitcoin then.

Some of these lies were that bitcoin’s limited block size was a threat to its future, Gavin Andersen (one of the software developers for Bitcoin) was expelled by bitcoin company Blockstream, and that Blockstream was controlling bitcoin’s source code.

The Joint Effort of the Bitcoin Community

After the BearWhale placed a huge order at Bitstamp exchange to sell all his bitcoins at the current $300 price, the few bitcoin holders then were overwhelmed with a huge burden, as they had no choice but to buy it up so as to avoid a further decrease in price.

Contrary to the present, when there is much more liquidity for Bitcoin, selling $9 million worth of the cryptocurrency then was enough to drive down price.

7 years ago today, the most notorious #Bitcoin bear in history abruptly sold 30,000 BTC.

Bulls answered the call, holding $300, a price that couldn’t be breached ✨pic.twitter.com/Q8hoSlvr6d

— RIZZO (@pete_rizzo_) October 6, 2021

They, however, displayed a commendable unity by successfully purchasing all of the Bearwhale’s coins. As a result, they were able to steady the bitcoin price which in turn increased the confidence of other investors.

What Happened to the BearWhale?

The BearWhale later realized that there was no need for the FUD that made him sell and came to a better conclusion. In a Reddit post that he published a few years later, Bearwhale signed a transaction to prove that he owned the Bitcoin address which dumped a large number of bitcoins. He noted: 

“None of the supposed facts which motivated my decision to sell were correct. It was all a carefully crafted and funded disinformation campaign… to discourage improvements to the bitcoin protocol to achieve financial gain at the expense of the community…Once I recognized the moves to discredit the core developers for what it was…I looked at bitcoin and the greater community again with a more critical eye and I came to…” better conclusions.

According to his Reddit post, the BearWhale bought back into Bitcoin in mid-2017, profiting from a later rally that year and probably still holding.

At the time of writing, Bitcoin is trading around $55k a tremendous increase in price compared to its stance seven years ago. This meteoric price increase proves many bitcoin doubters wrong, and highlights just how those who believed in Bitcoin’s early promise were rewarded handsomely.