On Monday, the Bitcoin and crypto space saw one of the most positive news events in months.
Citing three sources, CoinDesk reported that multi-billion-dollar payment giant PayPal is looking into rolling out cryptocurrency trades. A “well-placed industry source” said to the outlet:
“My understanding is that they are going to allow buys and sells of crypto directly from PayPal and Venmo. They are going to have some sort of a built-in wallet functionality so you can store it there.”
The other sources corroborated the statement above, with one adding that Coinbase and Bitstamp may be involved in the rollout.
PayPal’s move to adopt Bitcoin and crypto assets would be in line with its broader strategy. The company has been somewhat open with dabbling in crypto, with reports of an internal digital asset and a close relationship with Coinbase.
Many have seen this news as abundantly bullish for cryptocurrency. One user commented that if this was 2017, Bitcoin would have rallied dozens of percent off that headline alone.
But industry executives have reminded the community that it isn’t entirely bullish or positive for crypto. Here’s why.
PayPal May Soon Support Bitcoin, But It’s Not Entirely Bullish
With PayPal being one of the world’s foremost fintech companies with a market capitalization of nearly $200 billion, the news was well-received.
The company, after all, has over 300 million active users. And in terms of reach, it’s nearly as global as the cryptocurrency market.
Kraken’s chief executive Jesse Powell acknowledged this, writing on June 22nd: PayPal supporting Bitcoin will be amazing for adoption.
Believing that the company will “change their policies on account closures” though is naive, though, as Powell further explained:
“They’re still a centralized choke point and the government will continue to commandeer the financial system for extrajudicial sanctions. Not your keys…”
PayPal supporting #Bitcoin will be amazing for adoption, however, don't expect PP to change their policies on account closures. They're still a centralized choke point and the government will continue to commandeer the financial system for extrajudicial sanctions. Not your keys..
— Jesse Powell (@jespow) June 23, 2020
Stephan Livera echoed the skepticism. The podcaster and educator said that the only way in which this PayPal news is bullish is “if you think it results in more self custodied Bitcoin.”
That’s to say, the more power investors give to centralized platforms by depositing their cryptocurrency, the more damage can be dealt to Bitcoin.
Part of a Bigger Bull Case
Although Powell and others see some downsides to PayPal’s adoption of crypto assets, he is still bullish on Bitcoin.
During an interview with business news outlet Bloomberg earlier this month, the Kraken co-founder said that BTC could “surpass gold.”
Powell specifically cited the asset’s 21 million coin supply cap and its ten-year track record of growth as reasons for his optimism.
— Matt Case (@matthewryancase) June 16, 2020
Bitcoin “surpassing” gold, at least considering current prices, will mean that BTC needs to rally past ~$450,000. A rally to that level would mark a more than 4,500% rally from the current price of $9,700.