The online payment platform launched the crypto-currency trade for U.S. customers on November 12.
PayPal shares reached record highs on Monday, culminating a strong period of outperformance relative to the Nasdaq and the US stock market in general.
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Since November 12, the Nasdaq’s focus on technology has gained about 6.5%. The large-cap S&P 500 index rose 3.5% during the same period.
3-month PayPal stock performance by barchart.com
Although PayPal’s foray into the crypto world is not the only catalyst behind its superior performance, the commercial processor is well positioned to capitalize on the growing adoption of digital assets. Some analysts have even speculated that a higher price for Bitcoin (BTC) could have a positive effect on PayPal’s prospects.
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There’s also evidence that the payment processor may be positively influencing the price of Bitcoin. Recent industry data suggests that PayPal may have collected up to 70% of newly mined BTC in the weeks prior to the launch of its crypto-currency platform in the US.
Although estimates vary, a 2019 survey of 5,000 people stated that 6.2% of Americans over the age of 18 own Bitcoin. The survey said an additional 7.3% plan to buy BTC for the first time.
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If these numbers are to be believed, crypto-currencies could have a positive impact on PayPal’s business as more people gravitate to the easy-access ramps. Case in point: Square’s Cash App has experienced an increase in revenue since it allowed Bitcoin purchases. In fact, nearly 80% of the Q3 revenue from Cash App was derived from commissions charged to Bitcoin buyers.
PayPal Holdings (PYPL) shares have gained a whopping 17% since Nov. 12, the day the online trader launched its crypto currency trading platform for eligible US customers.
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PayPal plans to launch its crypto-currency services globally in early 2021. CEO Dan Shulman said it’s only a matter of time before his company begins supporting central bank digital currencies, or CBDCs, when they become available.