PayPal PYPL is leaving no stone unturned to bolster its presence in the promising cryptocurrency market.
This is evident from the latest investment of PayPal’s venture arm in U.S.-based tech startup TaxBit, a firm that provides cryptocurrency tax automation software.
Reportedly, other companies namely Coinbase, and Winklevoss Capital have also invested in TaxBit.
Founded in 2017, Taxbit’s software enables consumers and businesses to calculate the taxes owed on their cryptocurrency holdings.
As bitcoin and other virtual currencies are treated as property for tax purposes in the United States, Taxbit can help people to optimize taxes on these holdings.
We note that the move will enhance PayPal’s position in the cryptocurrency market.
PayPal Holdings, Inc. Price and Consensus
PayPal Holdings, Inc. price-consensus-chart | PayPal Holdings, Inc. Quote
Cryptocurrency Market Holds Promise
Cryptocurrencies, which hold the potential to revolutionize the process of peer-to-peer and remittance transactions, are gaining significantly from a decentralized system, low fee, transparency of distributed ledger technology, protection from consumer charge backs, and quick international transfers.
Additionally, the growing demand for alternative currency as a result of the ongoing pandemic remains a tailwind.
All these factors are driving growth in digital currency (especially bitcoin) transactions throughout the world. Per a report from Statista, the number of daily bitcoin transactions at third-quarter 2020 end exceeded 351 million, jumping significantly from around 200 million in first-quarter 2016.
Further, a report from Fortune Business Insights shows that the global cryptocurrency market is expected to hit $1.8 billion in 2027 from $754 million in 2019, witnessing a CAGR of 11.2%.
PayPal is well-poised to reap benefits from the rapidly growing market on the back of its latest move and strong focus on expansion of its bitcoin facilities.
In this data-driven world, blockchain-backed cryptocurrency space has gained solid traction on the heels of an increasing bitcoin adoption, the most popular and widely used digital currency.
Companies like Square SQ, Intel INTC, Advanced Micro Devices AMD and NVIDIA are all making efforts to strengthen presence in this market.
Coming to PayPal, the company helps merchants to accept crypto payments via partnerships with three major bitcoin payment processors — BitPay, GoCoin and Coinbase.
Further, the payment processing company recently launched a service that allows its customers to buy, hold and sell cryptocurrency such as Bitcoin and Ethereum directly from their PayPal and Venmo app.
Also, the company announced its intentions to enable cryptocurrency as a funding source across its 26 million merchants worldwide.
We note the latest investment will continue to aid PayPal in gaining momentum among customers.
PayPal currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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