New crypto service
Analysts predict that PayPal will grow due to the new Cryptocurrency service, as customers are showing high demand for it amid rising cryptocurrency prices. This will bring PayPal profit growth when the company starts charging fees for cryptocurrency transactions next year.
PayPal (PYPL) is becoming the largest buyer of the new Bitcoin offering as customers of its new Cryptocurrency service actively buy and sell Bitcoin, as well as cryptov currencies such as Ethereum and Litecoin.
Against the backdrop of macroeconomic uncertainty and growing demand for digital currencies, Bitcoin has grown by 170% and Ethereum by more than 360% since the beginning of 2020. Bitcoin has grown by almost 60% to around $19,000 since 21 October, when PayPal was licensed to use cryptographic currency by customers.
PayPal shares have grown by more than 100% since the beginning of the year and by 16.3% in the last month.
Mizuho Securities recently surveyed 380 PayPal users in the US and found that 17% of them had already traded with Bitcoin through their PayPal accounts. The customer group that traded in the crypt currency also showed higher activity as they used the PayPal application more than three times as much as others. In addition, 65% of those who traded Bitcoin through PayPal said they were willing to use the cryptovolta to buy goods and services.
This demand suggests that PayPal Cryptocurrency customer activity will bring the company significant revenue growth after it starts charging fees for buying/selling cryptocurrency from 2021. In announcing the launch of PayPal Cryptocurrency, PayPal has announced that it will not be charging fees for buying or selling cryptocurrencies until 31 December 2020 to allow it to attract as many cryptocurrency interested customers as possible. As for storage, PayPal promised not to charge any fees.
The company's stake in Bitcoin was placed by the CEO of Square Jack Dorsey and has already paid off in part: Square's revenues from the sale of Bitcoin in the third quarter were $1.63 billion, 618% more than in the third quarter of 2019, with a profit of $32 million. (1500% growth).
