Why is PayPal looking for cryptocurrency companies to acquire just days after announcing support for Bitcoin?
Payment processor PayPal is rumored to be exploring cryptocurrency-focused companies to buy, including cryptocurrency custodian BitGo, according to a new report from Bloomberg. This comes just days after PayPal confirmed that it is entering the crypto space by launching a cryptocurrency buying and selling service for its customers.
PayPal is ready to acquire BitGo and other cryptocurrency companies
Bloomberg cites sources familiar with the matter, who revealed that PayPal is currently in talks to buy BitGo for an undisclosed amount. BitGo, a Goldman Sachs-backed crypto custodian, is arguably one of the largest cryptocurrency custody providers in the industry. It currently provides custody services to major cryptocurrency companies such as Nexo, Binance, and Coinbase.
Anonymous sources indicated that PayPal and BitGo could complete the acquisition process in a couple of weeks. However, the source clarified to Bloomberg that the ongoing talks are far from reaching a concrete conclusion. "The talks could still fail and PayPal could choose to buy other targets."
Reports from PayPal buying cryptocurrency companies come on the heels of the company's announcement that it will begin allowing its 346 million customers to buy, sell and hold Bitcoin, Ethereum, Bitcoin Cash, and Litecoin on its platform. As such, PayPal's interest in buying BitGo is not unfounded, as it will require the services of a crypto custodian to support its new cryptocurrency offering.
PayPal is apparently moving everything towards crypto. In its announcement Wednesday, the payments firm also revealed that it would be partnering with digital asset service provider Paxos for its cryptocurrency company. The BitGo acquisition would further solidify the belief that PayPal is ready to dive into the cryptocurrency market.
While some industry executives like Ripple CEO Brad Garlinghouse are not thrilled with PayPal's cryptocurrency service as it overlooks the fundamental principles and benefits of cryptocurrencies, the market has reacted positively. The price of the dominant cryptocurrency broke the $ 13,000 level following the news.
It should be noted that neither PayPal nor BitGO have confirmed the acquisition rumors so far.