How PayPal stock is likely to benefit from the crypto move

How PayPal stock is likely to benefit from the crypto move
Updated: 11 Feb, 2021
2 mins read

PayPal stock (NASDAQ: PYPL) is likely to benefit from its crypto move as crypto service would help the largest digital payment platform in attracting more users in the days ahead.

Bitcoin price has hit the highest level since December 2017 amid investor’s assumption that PayPal’s crypto move would significantly increase crypto adoption. Meanwhile, PayPal stock hasn’t priced in the benefits of crypto services on financial and user growth performance.

PYPL PayPal Holdings, Inc. daily Stock Chart
PayPal stock performance. Finviz chart

Crypto move would improve revenue and financial numbers

PayPal has permitted its users from the United States to buy, hold, and sell bitcoin through their user account. The largest payment platform has also permitted users to make payments in bitcoin across all its merchants.

Users applauded PayPal’s crypto move. The company says after seeing the substantial user’s interest in bitcoin buying and selling, they have lifted weekly crypto purchase limits to $15K from $10K. The company hinted that they are planning to expand crypto services in 2021, with plans of offering complete crypto services on Venmo.  

PayPal will experience a significant impact of crypto services on its revenue and user base.  

PayPal will charge $0.50 on transactions up to $24.99, while the transaction rate will stand around 2.3% from $25 to $100. The transaction rate will reduce to 2% on $100.01 to $200. Similarly, transaction charges will reduce if users spend more dollars.

PayPal stock will benefit from additional revenue from crypto service

PayPal’s stock performance is correlated to its revenue and user growth. Its shares grew more than 70% since the beginning of this year amid the users and revenue growth as digital payments benefited from pandemic related social distancing policies.

“I think this is more about PayPal being smart and looking to the future when fiat currencies will go digital,” said David Birch, a director at payments consultancy Consult Hyperion. “I don’t think it makes much difference for bitcoin.”

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Justinas Baltrusaitis

Justin crafts insightful data-driven stories on finance, banking, and digital assets. His reports were cited by many influential outlets globally like Forbes, Financial Times, CNBC, Bloomberg, Business Insider, Nasdaq.com, Investing.com, Reuters, among others.