Paypal introduced cryptocurrencies to its platform last year in what turned out to be a major player in the world of cryptocurrencies. Analysts predicted that the decision by the world's largest payment processor to allow its users to buy and hold cryptocurrencies will provide the necessary inflection point for cryptocurrencies to go mainstream.
By launching this service, Paypal expected to witness a revenue increase similar to that of its competitor, Cash App, which recorded $ 1.63 billion in bitcoin revenue. Months later, the script is being developed.
A survey conducted by Mizuho Securities USA showed that roughly a fifth of Paypal's 346 million active users had already exchanged bitcoins prior to December 1, 2020, when the survey was published, while about 65% were ready to make purchases on the 28 million merchants who use bitcoin.
In the stock market, PayPal (PYPL) has performed well since it enabled bitcoin transactions. It has experienced a 20% increase in the last quarter and is expected to continue on a similar path. Mizuho expects the stock price to hit $ 350 in the coming months.
Activity and transaction volume on PayPal have also reached unprecedented levels. Statistics show that half of the bitcoin holders on Paypal use the app every day and approximately three times more than non-holders. This increased profit and activity by holders perhaps represents the record $ 242 million bitcoin trading volume that Paypal recorded on Monday.
The enormous growth seen in the short period shows that Paypal is closely following the path of Square's Cash app. Dan Dolev, a Fintech research analyst at Mizuho estimates that PayPal's cryptocurrency services could generate up to $ 600 million in revenue this year and may reach $ 2 billion in 2023.
Lisa Ann, an analyst at independent research firm MoffetNathanson, also expressed optimism in a written note to clients. One part says:
“In the long term, we believe that PayPal's cryptocurrency initiative has significant strategic value as they help PayPal diversify PayPal and Venmo applications into 'target applications' for a wide range of financial services, and position PayPal to help shape the role of cryptocurrencies (and government-backed digital currencies) in the consumer payment system. "