One of the biggest crypto-related stories of 2020 has been the announcement that PayPal, one of the biggest fintech platforms in the world, will adopt crypto transactions unto its platform.
According to reports, this will include enabling buying and selling of cryptocurrency on its platform as well as allow the acceptance of cryptocurrency for its over 26 million merchants.
The news sent shockwaves across the industry and is credited with boosting the bitcoin price to over $13,000 per token.
However, new reports suggest that this is only the beginning of PayPal’s foray into the crypto world. An October 22, 2020 report now states that PayPal is looking to acquire a number of cryptocurrency firms.
PayPal Takes the Cryptocurrency Plunge
As per sources close to the situation, PayPal will be acquiring some crypto trading firms, including BitGo, shortly. The source claims that PayPal is already in talks with BitGo regarding the acquisition and that the discussions have not been made public yet as the deal is not set in stone. Should negotiations fail, however, the source states that PayPal will likely acquire another of such firms.
BitGo operates by helping investors to securely store their cryptocurrency and given the amount of institutional support that the industry has recently received, this could be a profitable sector. There has been speculation about how much PayPal could buy BitGo for, given that the firm raised $58.5 million in 2018 at a $170 million valuation. Neither PayPal nor BitGo representatives have commented on the situation.
PayPal, when announcing the new development this week, stated that they would partner with Paxos Trust Company for its new products and services to customers. It should be noted that Paxos Trust Company acts as a competitor to BitGo and an acquisition move might be PayPal trying to corner that sector of the market.
BitGo applied back in August to become a regulated qualified custodian under New York State Banking Law and is backed by investors such as Goldman Sachs Group Inc., Craft Ventures, Digital Currency Group, DRW, Galaxy Digital Ventures, Redpoint Ventures, and Valor Equity Partners.
These moves being made by PayPal with regards to cryptocurrency are a testament to how far the industry has come and how vital it will be in the next generation of fintech. As the services are finally rolled out on PayPal, it will be apparent what the long-term effects of this will be.