PayPal has repored approximately $1 billion in cryptocurrency holdings, according to its recent quarterly earnings report submitted to the U.S. Securities and Exchange Commission (SEC). These holdings consist of $499 million in Bitcoin (BTC), $362 million in Ethereum (ETH), and $82 million in Bitcoin Cash (BCH) and Litecoin (LTC), showing over 30% growth since Q4 2022.
Adjusted profits and revenue rise, but shares slide
The fintech giant recorded adjusted earnings of $1.17 per share, an increase from 88 cents the previous year and a 10% revenue growth to $7 billion. However, PayPal cut its operating margin expansion forecast from 125 to 100 basis points, causing its shares to drop 5% in late trading. Market analysts believe the company’s checkout button may be losing ground to Apple, while high-interest rates have curtailed expensive purchases, particularly for low-income clients.
PayPal allows customers to buy, hold, sell, receive, and send crypto assets and use sale proceeds during checkout. The company relies on third-party trusts, such as Gemini and Coinbase Custody, for the custody and safekeeping of crypto assets. Venmo, a PayPal subsidiary since 2013, enables users to send Bitcoin, Ethereum, Litecoin, and Bitcoin Cash to others or external wallets. Venmo transactions are also compatible with PayPal wallets but are irreversible.
PayPal reportedly halted stablecoin development earlier this year due to an investigation by New York regulators into its partner, Paxos.
The role of payment providers in crypto adoption
Established payment providers can help expand crypto adoption beyond the existing user base. For instance, MetaMask wallet holders in the U.S. can purchase crypto using PayPal, facilitating user onboarding onto Web3. Additionally, PayPal debit card users can buy crypto on Coinbase.
Payment provider Stripe enables crypto companies to purchase crypto with fiat currency and provides an in-game widget for gamers to fund wallets. Mastercard has developed infrastructure and standards to certify transactions between customers and businesses on blockchain networks. At the same time, Visa has announced a project to promote mass stablecoin adoption on public blockchains and has partnered with Circle to enable USDC transactions on select credit cards.
