PayPal announce in its press release that “The migration toward digital payments and digital representations useful continues to accelerate, driven by the COVID-19 pandemic and therefore the increased interest in digital currencies from central banks and consumers.”In this release, PayPal went on to mention that “it plans to significantly increase cryptocurrency's utility by making it available as a funding source for purchases at its 26 million merchants worldwide.”
This news pushed Bitcoin and other altcoin prices higher Wednesday, with Bitcoin increasing the maximum amount as 8% intraday and up to $12,900 at some points.The news is of most significance for those seeking crypto adoption because it gives many people the power to use cryptocurrency as a sort of payment while also giving merchants the power to simply accept it.
PayPal specified that it might initially support Bitcoin, Bitcoin Cash, Ethereum, and Litecoin, but Chief Executive and President, Dan Schulman, hinted at widening its offering by saying that “we are working with central banks and thinking of all sorts of digital currencies and the way PayPal can play a task .”
PayPal also intends to expand these features to its payments app, Venmo, and ‘select international markets within the half of 2021.’PayPal intends to form payments with cryptocurrencies available early next year, adding to the growing list of payment and investment apps that allow the acquisition and use of cryptocurrencies.
The news of PayPal's integration of cryptocurrency payments isparticularly compelling because it comes within the wake of Square’s (SQ) Bitcoin investment and a growing trend of companies assets being converted to Bitcoin so as to hedge against inflation and therefore the lowering purchasing power of the US dollar.
In August, business analytics and mobility platform, MicroStrategy (MSTR) started a trend by purchasing $250 million worth of Bitcoin. It then purchased another $175 million in September. Shortly after, Square, a payment company and competitor to PayPal, reallocated 0.1% of its market capitalisation , or $50 million, into Bitcoin in early October. Since then the trend has grown. Now there are thirteen publicly traded companies that hold Bitcoin.