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CEO says PayPal’s crypto commerce may reach $200M volume in just months

Republished by Plato

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As the price of Bitcoin continues to reach new all-time highs, major corporations with existing crypto offerings in place are beginning to discuss grand plans for the future. 

Most recently, Dan Schulman, CEO of PayPal, hinted at future developments for PayPal’s crypto offering during Forbes’ “2021 Blockchain 50 Symposium: Crypto Goes Corporate,” an online event that took place on April 13.

During a fireside chat with Michael del Castillo, associate editor at Forbes, Schulman mentioned that the financial system will undergo more changes over the next five years compared to the progress that has been made in the previous 30 years. Schulman further noted that digital currencies, like Bitcoin (BTC), will lead the way, mentioning that there will be far less cash and credit card transactions in the next five to 10 years. Schulman said:

“We are moving into the era of digital currencies, and those digital currencies hold tremendous promise, whether these are cryptocurrencies or central bank digital currencies. I believe digital currencies can increase the utility of payments and make the financial system more inclusive and less expensive.”

Digital currencies will create financial inclusion

According to Schulman, one of the biggest challenges facing society today is the fact that millions of people everywhere are being excluded from today’s financial system. This has become especially apparent in the United States, as Americans with bank accounts have started receiving their latest round of economic stimulus checks via direct deposit. Unfortunately, millions of unbanked and underbanked Americans must wait much longer to receive paper checks in the mail.

Schulman noted that today’s financial system is relatively inefficient, mentioning that it takes too long to receive money, which is even more challenging for lower-income individuals. “It’s not inclusive at all,” he said.

In order to solve these ongoing issues, Schulman explained that PayPal’s crypto offering, which went live in the United States in November 2021, will eventually allow users to do more than just buy, sell and hold Bitcoin, Ether (ETH), Litecoin (LTC) and Bitcoin Cash (BCH). While PayPal revealed at the end of March that the platform would soon allow its merchants to accept cryptocurrency as a medium of exchange, Schulman hinted that this is just the beginning of many possibilities:

“PayPal really wants to use cryptocurrency as a funding source for everyday transactions. The endgame, though, is a more noble vision of this inclusive economy, and things will be done much differently than today.”

In addition to crypto payments, Schulman shared that PayPal will eventually leverage smart contracts and other underlying technologies to ensure that a payment is more than just a transaction. “This is the promise of all digital currencies — they can create incremental value from just a basic transaction.”

Digital currency innovation could take longer than expected

While PayPal’s crypto plans are notable, it’s important to point out that innovation may take longer than expected. For instance, when del Castillo asked Schulman about how long he expects PayPal’s crypto service to reach $200 million in volume, Schulman boldly answered that it would take only a matter of months, or maybe less.

Although this is encouraging for crypto adoption, del Castillo noted that it took Coinbase Commerce, a platform that supports cryptocurrency payments for online retailers, 13 months to generate $200 million in volume.

However, Cointelegraph previously reported that the success of Coinbase Commerce was partly due to the 8,000 retailers currently using Coinbase for payment services. Schulman mentioned during the fireside chat that PayPal has over 375 million consumers of digital wallets and about 30 million merchants on the platform. In turn, PayPal may very well break new boundaries when it comes to digital payments for commerce.

No plans to add Bitcoin to PayPal’s balance sheet

Although Schulman appears to have a highly optimistic attitude toward cryptocurrency adoption, the executive shared that there are still no plans to add Bitcoin to PayPal’s balance sheet in 2021. “I think the probability of this is low,” he said.

When asked why, Schulman explained that PayPal’s balance sheet consists of safe assets with less volatility since funds need to be used in ways that may return money to shareholders. “We really need to be sure of what’s on that balance sheet to ensure consistent capital allocation,” Schulman said.

While this may be, Michael Saylor, chairman and CEO of MicroStrategy, has a different belief regarding Bitcoin’s volatility. This shouldn’t come as a surprise, though, as the business intelligence firm recently announced that its board of directors would receive bonuses in Bitcoin instead of fiat.

Saylor also shared his thoughts on the future of Bitcoin during Forbes’ “2021 Blockchain 50 Symposium: Crypto Goes Corporate” event. During a fireside chat with Steve Ehrlich, digital assets research director at Forbes, Saylor commented that there has been “a huge change across the sentiment in the corporate world” toward Bitcoin. However, he noted that thousands of companies are still hesitant to add Bitcoin to their balance sheet for two reasons: volatility and intangible accounting.

According to Saylor, volatility is a misnomer, noting that Bitcoin has been the most successful asset of the decade because it has been doubling in price every six months for 10 years straight. Saylor commented:

“The winning team of everything on earth is always the most volatile. Anyone who thinks volatility is bad must be betting on losers.”

Saylor further explained that the only logical reason why most companies still haven’t added Bitcoin to their balance sheet is due to intangible accounting methods, noting this is more problematic than volatility. Although this may be the case for many companies, Saylor remarked that MicroStrategy’s balance sheet will be 99% invested in Bitcoin. He said:

“Our strategy is to develop, acquire and hold Bitcoin. Crypto and Bitcoin are gaining acceptance and adoption. If you look at March 2020 versus where we are today, you can see it’s an extraordinary developing asset class. I also think the Coinbase direct listing will be a massive coming out party for the crypto economy.”

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cointelegraph.com/news/ceo-says-paypal-s-crypto-commerce-may-reach-200m-volume-in-just-months

Blockchain

DOGE is Young People’s Middle Finger to the System, Says Mike Novogratz

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Mike Novogratz, in a research report, stated that Dogecoin is “the most honest shitcoin”, calling it a “store of value” for young people wishing to express a “little bit of a middle finger to the system”.

Dogecoin’s Recent Price Action

DOGE has entered a steep and stunning climb during the past few months, going from mere pennies to over $0.65. Young people betting on the speculative and volatile crypto asset have made staggering amounts of money thanks to the recent insane rate of return.

Many theorize that this rise has been fueled by Tesla founder and business mogul Elon Musk, who often refers to Dogecoin on his infamous Twitter profile, tweeting in a (usually) positive manner. Oftentimes when an “Elon tweet” comes out regarding Dogecoin, it gives a nice little boost to the price.

Most recently, Elon Musk revealed that he would be hosting SNL, dropping a single hint: Dogefather. This enigmatic message has spurred thousands of young people worldwide to invest in DOGE, which, although extremely risky, has been facing undeniably bullish price action as of late. Will Elon Musk’s SNL special provide the fuel needed for DOGE to power through to over a dollar, or will it be a ‘sell the news’ event?

Novogratz Draws Parallels to GME

Novogratz, in his interview, urged people to “listen to what Dogecoin is saying”, as he sees it as very comparable to the GameStop fiasco (where a group of young retail traders pushed GME to new heights, partially in an attempt to liquidate hedge funds that were shorting the stock).


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“There is nihilism and excitement to it,” Novogratz stated, adding, “there’s something really pure about it.”

Indeed, Dogecoin is not a successful ‘company’ in the traditional sense, and there is little to no innovative development work going on behind the scenes, but we’ve seen (in the stock market, for example) that the power of the masses if placed behind a single unifying idea, can work wonders.

It’s a massive game of tug of war — whether or not Dogecoin can sustain this dizzying momentum remains to be seen. One thing is for sure: millions of people will be tuning in to watch SNL this week.

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/doge-is-young-peoples-middle-finger-to-the-system-says-mike-novogratz/

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Blockchain

Latin America’s Biggest Online Marketplace, MercadoLibre, Disclosed Bitcoin Holdings

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On a financial results report dated May 5th, e-commerce giant MercadoLibre dropped the bomb. The company is the latest institution to add Bitcoin to its balance sheet. It follows MicroStrategy, Square, and Tesla’s highly covered buys. Bitcoin’s institutional adoption is in its infancy, but advancing non-stop.

In the financial highlights for 2021’s First Quarter, the company wrote a succinct:

As part of our treasury strategy this quarter we purchased $7.8 million in bitcoin, a digital asset that we are disclosing within our indefinite-lived intangible assets.

A modest allocation, considering MercadoLibre has almost $4B in assets, a cash reserve of $1.1B. It also has a market capitalization of approximately $76B. However, the move might be part of a bigger plan. The company recently opened a section on their website dedicated to real state commerce in Bitcoin and Bitcoin only. The pilot program includes 75 properties and 7 real state agencies willing to accept the cryptocurrency.

Related Reading | JPMorgan Partners With Singapore’s DBS to Launch Blockchain-Based Payment Platform

The Bitcoin-on-the-balance-sheet club

The investment puts MercadoLibre in a pretty exclusive club. The institutional adoption pioneer was MicroStrategy, a company that then issued bonds to buy even more Bitcoin. Twice. At the time, Bitcoinist reported:

Microstrategy announced today that it purchased $15 million worth of Bitcoin. The company’s CEO, Michael Saylor, tweeted this morning that his company had bought approximately 253 BTC, bringing its total holdings to about 91,579 BTC.

After that, Square announced a moderate buy of $50M worth of Bitcoin, and months later another one of $170M. It’s worth noting that the company buys and sells BTC through their flagship product CashApp. And that it keeps buying more. Six months ago, Bitcoinist reported:

Ikigai Asset Management’s Hans Hague recently noted that per his analysis, Square and Grayscale alone have accumulated $2.3 billion worth of Bitcoin in the past quarter.

The biggest player of all, of course, is Elon Musk’s Tesla. Reports that the company made more money from that investment than for selling cars are all over the Internet. In any case, Tesla made a big splash when it entered the space. Bitcoinist reported:

Traders flocked into the cryptocurrency market a day after American carmaker Tesla announced that it had purchased $1.5bn worth of Bitcoin as “alternative reserve assets” to their cash holdings.

In its filing with the Securities and Exchange Commission, Tesla said it plans to buy more Bitcoin in the future and—maybe—even enable its use as a medium of payment for its products and services.

MercadoLibre stock chart

MercadoLibre stock chart | Source: MELI on TradingView.com

Related Reading | Southampton FC Extend Partnership Deal with Blockchain Leader The Coingaming Group

More about MercadoLibre

It may not be a big name in the European and North American markets, but MercadoLibre is ubiquitous in Latin America. The company operates in:

  • Argentina
  • Brazil
  • Chile
  • Uruguay
  • Mexico
  • Spain
  • Bolivia
  • Venezuela
  • Colombia
  • Ecuador
  • Peru
  • Costa Rica
  • Dominican Republic
  • Guatemala
  • Honduras
  • Panama

In the quoted financial results report, they describe themselves as: 

Founded in 1999, MercadoLibre is the largest online commerce ecosystem in Latin America, serving as an integrated regional platform and as a provider of the necessary digital and technology-based tools that allow businesses and individuals to trade products and services in the region. The Company enables commerce through its marketplace platform which allows users to buy and sell in most of Latin America.

A question remains, will Bitcoin holdings make MercadoLibre’s stock rise?

Featured Image by Mark König on Unsplash - Charts: TradingView

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://bitcoinist.com/latin-americas-biggest-online-marketplace-mercadolibre-disclosed-bitcoin-holdings/?utm_source=rss&utm_medium=rss&utm_campaign=latin-americas-biggest-online-marketplace-mercadolibre-disclosed-bitcoin-holdings

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Blockchain

Novogratz’s Galaxy Digital set to acquire BitGo for $1.2B

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Galaxy Digital is in the process of acquiring BitGo for $1.2 billion, which would be settled in stock and cash

Galaxy Digital, the firm owned by popular investor Mike Novogratz, is set to acquire BitGo, a leading independent digital assets infrastructure provider. The deal is worth roughly $1.2 billion and will be paid in both stock and cash.

In a press release yesterday Galaxy Digital said, “The acquisition will position Galaxy Digital as a leading global full-service platform for institutions seeking access to the crypto economy, offering an unparalleled breadth of industry-leading products and services at scale.”

Several reports surfaced last month, suggesting that the two companies are in advanced talks regarding an acquisition. Mike Novogratz, CEO and Founder of Galaxy Digital, said the acquisition of BitGo would turn his company into a one-stop-shop for institutions, boosting their efforts to institutionalise digital asset ecosystems and blockchain technology. Novogratz added, “The power of the technology, solutions, and people we will have as a result of this acquisition will unlock unique value for our clients and drive long-term growth for our combined business. We are excited to welcome Mike Belshe and the talented BitGo team to Galaxy Digital.”

Per the terms of the agreement, BitGo shareholders are set to receive 33.8 million newly issued shares of Galaxy Digital common stock. Furthermore, they will be paid $265 million in cash, which brings the total value of the deal to approximately $1.2 billion.

BitGo is one of the leading regulated custodians in the cryptocurrency sector. It currently provides services to over 150 exchanges and 400 institutional clients. BitGo controls over $40 billion in assets under management by supporting the custody of over 400 coins and tokens.  BitGo CEO and Founder Mike Belshe said joining Galaxy Digital is an exciting new chapter for the company, allowing their clients to access a wide set of financial solutions.

Galaxy Digital planning to go public in the US

Galaxy Digital is a publicly-listed company in Canada. However, the firm is planning to officially list on a US stock exchange this year. In that regard, the company’s board of directors approved a proposed reorganisation and domestication designed to help the company achieve its goal of going public in the United States.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://coinjournal.net/news/novogratzs-galaxy-digital-set-to-acquire-bitgo-for-1-2b/

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