PayPal reported in its Q4 2020 earnings report that the adoption of cryptocurrencies is helping to attract and retain users. As a reminder, in October 2020, PayPal announced that its users will soon be able to buy Bitcoin, Bitcoin Cash, Ethereum and Litecoin from their account.
The service for buying digital assets debuted in November, and it did so even despite a noticeable portion of criticism from the cryptocurrency community. Be that as it may, representatives on both sides are now clearly pleased with the implementation.
First, a little explanation. The support of cryptocurrencies by the PayPal platform really became an important step in their development last year, however, some representatives of the blockchain community have also criticized this decision. The fact is that the company, in fact, does not allow its customers to fully own the crypt – and including display it to third-party addresses. So, in the end, they received a kind of coupons for cryptocurrency, but not the cryptocurrency itself.
Of course, users can make money on the growth of blockchain assets, but all this happens exclusively within the framework of the payment platform. We believe that this approach cannot be compared to owning a crypt on the same hardware wallet, however, for beginners, such a scheme may be suitable.
In addition, to analyze the topic of cryptocurrency security, you need to spend a lot of time, and at least a newly minted user of coins will not lose them on PayPal. That is, in general, such a solution is not suitable for professionals, but for beginners it is quite good.
PayPal and cryptocurrencies
In an appeal to investors, PayPal representatives noted that after buying cryptocurrencies, platform users log into their accounts twice as often. Although PayPal CEO Dan Shulman did not go into details of the earnings reports, he said that “the volume of cryptocurrency trading on the platform has significantly exceeded all expectations.” Here is his line in which he commented on the situation.
We all know that the current financial system is outdated.
Shulman believes in a future where all people – not just the rich – will have access to financial services. To help achieve this goal, he pledged to “make a significant investment in a new business unit for cryptocurrency, blockchain and digital assets,” Decrypt reports. Overall, PayPal recorded $ 277 billion in total payments and $ 6.1 billion in revenue.
This is the company’s best quarter based on results to date. This means that it can be assumed that the introduction of cryptocurrencies, among other things, influenced the reputation of the platform, which, after the innovation, seemed to users to be much more modern and reliable.
We checked the actual data: today, PayPal shares are trading at $ 270, while at the beginning of November they were offered for $ 187. Most likely, the platform’s decision to interact with cryptocurrencies forced investors to take a closer look at the company’s growing potential and allowed them to see it.
So far, the payment platform only simplifies the purchase, storage and sale of cryptocurrencies. She plans to enable customers to use cryptocurrency on their PayPal accounts to shop at 29 million merchants worldwide by the end of this year. But even without this feature set, the integration has already paid dividends for PayPal, as the company receives a percentage of every cryptocurrency transaction conducted through the platform.
Another interesting statistic: after the integration of cryptocurrencies into PayPal, their price has increased significantly to this day. For example, Bitcoin has risen in price from 12,221 to more than 37 thousand dollars. Over the same time span, Ethereum quadrupled from just under $ 400 to just over $ 1,600. Bitcoin Cash jumped from $ 260 to $ 440. At the same time, Litecoin rose from $ 50 to $ 150.
Of course, this happened not only by opening access to cryptocurrencies to PayPal customers, but to some extent they still had a hand in this.
It is logical to assume that PayPal will pay even more attention to working with digital assets this year. This will attract new investors to the market and accelerate the adoption of Bitcoin around the world.
We believe that introducing cryptocurrencies into the PayPal platform will benefit the blockchain asset industry. Thanks to this, new users can try themselves in working with cryptocurrencies and in practice see their advantages. In addition, company representatives note the growing interest in this niche among customers and their growing activity. Therefore, it is likely that after the publication of this information, other similar platforms will think about supporting the crypt – well, this will lead to an even greater distribution of coins.