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Bitcoin business could add $2B to PayPal’s revenue by 2023

PayPal's Bitcoin business could boost its revenue with the expected rise of the usage of the crypto feature of its app.

Image by: Wikipedia Commons

Mon, 18 Jan 2021, 14:22 pm UTC

PayPal made headlines last year with its entry into the crypto space. The move could turn out to be a very profitable one for the payments giant with one analyst saying that the company’s Bitcoin business could add $2 billion in revenue by next year.

Don Dolev, an analyst from Mizuho Securities, expects PayPal’s Bitcoin business to rake in $2 billion in revenue by 2023, reported. The analyst also added that the payment giant’s revenue could rise by 20 percent this year with the expected increase in usage of the crypto trading feature of its app.

“Both our survey and management commentary unveil a dramatic increase in engagement due to crypto,” Dolev said in a note to clients, according to MarketWatch. “As evidence, PayPal recently said that 50% of its crypto users are opening the PayPal app daily.”

Dolev’s survey also revealed that those who trade BTC via PayPal’s platform use the company’s app three times higher than non-bitcoin traders. The survey also revealed that BTC traders have significantly higher cash balances on their PayPal digital wallets compared to their non-trading counterparts.

Meanwhile, Moffet Nathanson analyst Lisa Ellis is also upbeat on the earning potential of PayPal’s Bitcoin business. She believes that the company’s crypto business could add up to $600 million in revenue this year.

“Over the long-term, we believe PayPal's cryptocurrency initiatives have significant strategic value, helping PayPal diversify the PayPal and Venmo apps into 'destination apps' for a broad range of financial services, and positioning PayPal to help shape the long-term role of cryptocurrencies (and government-backed digital currencies) in the consumer payment system,” Ellis said in a note to clients on Friday.

PayPal announced its cryptocurrency service in October 2020. “The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly,” PayPal President and CEO Dan Schulman said in a press release.

With the crypto service gave, PayPal’s more than 346 million active users can now buy, sell, and hold Bitcoin and other cryptocurrencies using the PayPal accounts. The new feature became a hit that at one point, the platform’s users were buying 70 percent of all newly minted BTC.

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