Less than a week ago, PayPal made waves in the cryptosphere as it announced that customers would be able to buy, sell and hold bitcoin and other virtual coins using their online wallets.
The company also announced that starting in early 2021, customers would also be able to use their crypto to shop at the 26 million merchants on its network.
This is big news for Bitcoin, and we’ve looked back at the PayPal story so far. Now let’s dive deeper into what this means for crypto in the future.
Customers in the US can now buy, sell and hold four different cryptocurrencies on PayPal: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.
PayPal users can now learn about crypto and track prices without leaving the app – marking the entrance of a new crypto exchange into the market.
These headlines coincided with recent news of Square and MicrosStrategy announcing their investments into Bitcoin. The result? A Bitcoin bull run that had its price cross ten lakh for the first time since 2018.
Reading Between the Lines
With more than 340 million users on its network, PayPal brings crypto to an entirely new segment of potential investors. For context, Bitcoin currently has 32 million non-zero addresses, 5 million of which are active.
The company also announced that it would enable crypto as a funding source for purchases in 2021. This means users can use their crypto holdings to make purchases within the PayPal merchant network. This has revived crypto’s use case as a system of payments, as the company will handle the fiat-crypto conversion for payments made.
However, this raises the question – will anyone actually use it? Why would someone spend an investment asset, and pass up any future profits?
While some users may find it more convenient to complete PayPal transactions using Bitcoin – these users are hardly the norm.
Also worth noting is that you cannot transfer your crypto out of PayPal just yet. The company has not yet given any indication whether it will allow withdrawals in future.
The company’s crypto functionality do appear limited at present. However, these headlines also represent part of a larger forward movement for cryptocurrency as a whole. Just as with Kraken’s charter to begin banking, PayPal’s entry into crypto is public validation by mainstream players in finance.