PayPal and Venmo could be adding cryptocurrency to their suite of payment options. Inside sources verified by CoinDesk, a crypto-focused news service, say a built-in wallet feature could be rolled out within three months.
There is no official announcement yet — only the CoinDesk sources — but if true, this would be a huge development for Bitcoin, and other crypto assets, too.
For PayPal and Venmo, meanwhile, the timing would be excellent.
“My understanding is that they are going to allow [buying and selling] of crypto directly from PayPal and Venmo,” one of the unnamed sources told CoinDesk. “They are going to have some sort of a built-in wallet functionality so you can store it there.”
If the crypto wallet becomes reality, PayPal — which is also the parent company of Venmo — would likely partner up with top-tier cryptocurrency exchanges to provide liquid access to crypto assets.
This would make sense because PayPal already has significant crypto relationships. Coinbase, the U.S.-based crypto exchange giant, has enabled PayPal accounts for Bitcoin transactions since 2016.
A PayPal-Venmo crypto wallet would dramatically expand the potential buying audience for Bitcoin, while doing so in an intuitive and easy-to-use way.
According to e-commerce data from Statista, PayPal had 305 million active user accounts as of fourth quarter 2019, and Venmo saw $31 billion in total payment volume for first quarter 2020.
If hundreds of millions of PayPal and Venmo users had an easy way to buy and store Bitcoin, and could do so with small dollar amounts via the same payment app they already use routinely, Bitcoin’s “store of value” proposition could become easily accessible to Millennials and Gen Z.
We have already seen how the rise of online trading platforms (OTPs) and zero-commission trading have inspired Millennials to wade into the stock market en masse.
Easy access to cryptocurrency, via smartphone payment apps that are already widely used, could do the same thing for Bitcoin — and enable PayPal and Venmo users to buy Bitcoin in small amounts, the same way that OTPs allow for the fractional purchase of stock shares.
It is already possible to buy and sell Bitcoin via Cash App, a competitor to PayPal and Venmo.
This increases the likelihood that the PayPal-Venmo wallet project is real, as they have natural incentive to catch up with a competitor.
At some point in the near to medium-term future, Bitcoin is likely to break through its near-term resistance level at $10,000, thanks to growing levels of institutional interest.
When that happens, it could be a short period of time before Bitcoin is again challenging its late 2017 all-time highs of $20,000.
And then, if Bitcoin enters the Millennial consciousness as “digital gold” even as the U.S. dollar is in freefall — thanks to the relentless liquidity creation of the Federal Reserve — we could see Millennials start to embrace Bitcoin with a real sense of urgency.
And if PayPal and Venmo have Bitcoin-enabled access at that point, a surge in Millennial interest would be coupled with mass-scale ease of buying, in amounts as small as a few dollars a time. If Alice sends Bill $10 by Venmo to pay for her share of tacos and beer, maybe Bill throws the $10 into Bitcoin, and so on.
This is a recipe for Bitcoin reaching stratospheric heights even faster than anyone expected.
And something like this is bound to happen eventually, regardless of whether it is PayPal and Venmo who open the floodgates or someone else.
Facebook, for example, is still very much in the hunt for creating a crypto offering of some kind — which would in turn mean creating payment rails and crypto wallet accessibility for billions of users.
As “digital gold” and the purest form of hard money ever created, it is slowly but surely becoming Bitcoin’s world now. Except we might soon ditch the “slowly” part as the dollar tips into terminal decline and the adoption of Bitcoin as a savings mechanism takes off at hyper speed, enabled by payment rails that reach out first to hundreds of millions, and then billions, of users.