E-commerce giant Paypal’s stock price surged to a new all-time high of $223.16 on Monday, December 14. Since November 12, when the payments giant opened the way for its US customers to start trading cryptocurrency, the stock has soared 17%.
The stock’s record-breaking performance comes after Paypal recently reported a drop in its third-quarter earnings in October. While that performance subsequently forced Paypal not to provide preliminary guidance for 2021, there is, however, a belief that the cryptocurrency trade service will result in a turnaround of the company’s fortunes.
To illustrate, according to one report, Paypal stock bulls are expecting online “penetration of total retail spending to continue growing this holiday shopping season during the coronavirus pandemic.” To support these bullish sentiments, the report quotes Bryan Keane, an analyst at Deutsche Bank saying:
A recent PYPL survey revealed 54% of PYPL users have an interest in its crypto offerings and we believe there has been strong interest in demand thus far. Even more powerful is the frequency of visits to the PYPL commerce portal from crypto users, which will lead to higher customer engagement and more monetizable transactions.
Paypal Customers Buying All Newly Minted BTC
In the meantime, starting in early 2021, Paypal customers will also be able to use cryptocurrencies to shop at the 28 million merchants on its network. This will likely result in increased demand for cryptocurrencies by Paypal’s clients and ultimately increased revenues for the company.
Meanwhile, as Paypal’s stock was touching a new high, Bill Barhydt, the CEO and co-founder of Abra was tweeting that demand for bitcoin on the payment giant’s platform alone now exceeds the daily supply of new coins. Barhydt wrote:
Paypal (alone) now fulfils more bitcoin demand than the amount of bitcoin created daily. (In) 2021 or 22 will highly likely see a retail bitcoin ETF. Demand will likely go up 100x at that point. While I discourage using Paypal to buy bitcoin ( Abraglobal is the way) …wow.
Still, despite the influence of Paypal’s crypto service on the price of BTC, some bitcoiners like Barhydt are still wary of the implications of the company’s crypto policies on adoption efforts. Paypal has previously said its customers will not be able to withdraw or transfer their crypto funds to outside wallets. However, others like Twitter user Anthony Acquadro argue that “those who participate in expanding the space must be welcomed.”
Meanwhile, at the time of writing, the Paypal stock had pulled back to $220.79, a price which, however, is still “above a cup-base buy point of 215.93.”
Do you think the surge of the Paypal stock is related to the company’s crypto service? Tell us what you think in the comments section below.
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