According to a report out of Bloomberg, PayPal may be involved in acquiring various crypto related companies. One of the companies involved in the report was BitGo, who is a digital asset custody leader among institutional investors.
PayPal Wants More Crypto
Only a day after PayPal announced that they were launching a new service for users to buy, hold, and sell cryptocurrency, rumors are now surfacing on the payment giants next move.
According to a report out of Bloomberg, PayPal could be on a shopping spree in the crypto space. According to Carol Massar, an anchor at Bloomberg, PayPal may be interested in acquiring many companies. BitGo, a leader in digital asset custody was one of the names mentioned in the report.
*PAYPAL SAID TO BE IN TALKS TO BUY CRYPTO FIRMS INCLUDING BITGO
— Carol Massar (@carolmassar) October 22, 2020
According to Bloomberg, the people involved in these negotiations could not be named. The deal with BitGo could happen in the next few weeks, but it is still not a slam dunk. PayPal could very well express interest in other competitors if the two parties can not come to a mutual agreement.
In terms of valuation, there was no comment on what Paypal’s offer would be for BitGo. It is important to note that back in 2018, BitGo was valued at $170 million through its $58.5M raise. Since 2018, the digital asset markets have seen significantly higher demand across institutional investors. Taking this into account, the current valuation of BitGo could be much higher than 2018 values.
How PayPal would leverage BitGo is still uncertain. What we do know is that PayPal most recently partnered with Paxos Trust Company which is a direct competitor to BitGo. This partnership was initiated to help PayPal bring cryptocurrency to their digital wallets.
PayPal Gearing Up For Bank Competition
Back in August of this year, the OCC issued new guidelines stating that nationally chartered banks in the United States could offer crypto custody services to their customers. This means that banks can offer custody solutions by holding private keys in a centralized manner. With banks across the globe fighting for market share in a 0% interest rate environment, offering crypto to retail clients could provide significant upside. PayPal could be attempting to position itself for a massive shift in traditional banking. Despite BitGo being known for their institutional support relating to digital asset custody, they no doubt have the infrastructure and resources in place to help PayPal scale to the masses on the retail side.
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