The online payment platform, PayPal, launched cryptocurrency trading for United States customers on November 12. The PayPal Holdings (PYPL) stock reached record highs on December 14, capping off a major period of outperformance compared to the Nasdaq and the wider US stock market.
Since November 12, the tech-focused Nasdaq has gained about 6.5%. The wider S&P 500 Index of the large-cap stocks is up by 3.5% in the same period.
Even though PayPal’s exploration of the crypto market is not the only catalyst behind its major outperformance, the merchant processor is perfectly positioned to capitalize on the increasing adoption of digital assets.
Some of the analysts have even speculated that a higher Bitcoin price may have a positive impact on PayPal’s prospects. There is also growing evidence that the payments processor could be positively influencing BTC’s price. Recent data indicates that PayPal might have scooped up to 70% of the newly mined bitcoins in the weeks leading to its crypto platform going live in the United States.
Estimates vary but a 2019 survey of 5,000 people claimed that 6.2% of Americans who are above the age of 18 own bitcoin. This survey also said that an additional 7.3% are planning to buy bitcoin for the first time.
If the numbers from that survey are to be believed, cryptos may have a huge positive impact on PayPal’s business as more individuals gravitate to easy onramps. One example: Square’s Cash App has seen its revenue grow since enabling bitcoin purchases. Almost 80% of Cash App’s third-quarter revenue came from fees charged on Bitcoin buyers.
PayPal now plans to launch its global crypto services in early 2021. The CEO, Dan Shulman, said that it is just a matter of time before his company begins supporting central bank digital currencies, CBDCs, as they become available for trading.