PayPal Follows Bitcoin Startups, Laying Foundation for Crypto Payments

Key Takeaways

  • PayPal’s recent entry into cryptocurrencies has renewed growth in Bitcoin’s payment narrative.
  • Companies like BitPay, Lolli, and Honey have been laying the groundwork for Bitcoin payments through free rewards, merchant partnerships, and institutional products.

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The latest swarm of billionaire investors have bought Bitcoin for one reason: Its store of value narrative. Still, with the arrival of PayPal, the original peer-to-peer electronic cash may find renewed strength as a medium of exchange. 

Invoicing PayPal With Bitcoin 

PayPal’s entry has made a huge impact on the crypto industry since announcing its adoption of various digital assets. Over 346 million users are now allowed to buy, sell, and store Bitcoin, Ethereum, Bitcoin Cash, and Litecoin.

ItBit exchange, which acts as a proxy for Paypal’s trading volume, is doing up to $35 million in trading volume daily. 

ItBit exchange trading volume
ItBit exchange trading volume. Source: Nomics

Bitcoin, followed by Ethereum, has attracted many new investors in the on-going economic crisis. And, PayPal is clearly capitalizing on this uptick even if payments have been restricted upon rollout. 

Nevertheless, Dan Schulman, the CEO of PayPal, has confirmed that customers will be able to make crypto payments starting next year. PayPal will convert customers’ crypto into fiat or any desired option for the merchant in real-time. Schulman said in a CNBC interview

“Early next year we’re going to allow cryptocurrencies to be a funding source for any transaction happening on all 28 billion of our merchants. That will significantly bolster the usage of cryptocurrencies.”

Long before PayPal, BitPay has been one of the leading service providers in this space, enabling conversion of customer’s crypto to make fiat payments to merchants or companies. While PayPal’s entry threatens the company, BitPay’s CEO Stephen Pair believes that: 

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