With PayPal’s crypto integration, Bitcoin could triple its user base

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Bitcoin (BTC) price hit the $ 13,000 mark again after PayPal’s announcement yesterday sparked a strong rally that drove the price to a new 2020 high.

Bitcoin price, currently at $ 13,100, has risen nearly 10% since it was announced, and BTC is on the verge of overtaking PayPal as the 21st largest asset by market cap.

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PayPal’s crypto announcement comes two weeks after Square, another payment giant, announced its own foray into Bitcoin by investing around 1% of its assets in Bitcoin.

According to Lanre Jonathan Ige, a researcher at Amun AG, the ongoing trend towards large investments will go a long way in sparking institutional interest in Bitcoin. Ige said:

“Companies often follow the trend, and we can expect a number of other companies to follow suit with Square and Microstrategy as asset returns continue to impress.”

However, the recent news from PayPal is more likely to bring the masses to Bitcoin than Bitcoin to institutions. This is because PayPal may introduce a larger audience to cryptocurrency as an investment vehicle for the future and as a payment method for the future. This has been one of the main focuses of the Bitcoin community when it comes to mass adoption.

PayPal should strengthen Bitcoin’s user base

According to glassnode, Bitcoin currently has over 187 million users, or “hodlers”. While impressive, crypto analyst Willy Woo found that pales in comparison to PayPal’s 487 million users.

Total Bitcoin HODLer. Source: Twitter

By adding Bitcoin, PayPal is bringing the name closer to a mainstream audience. While it is currently only possible to buy, sell and hold Bitcoin through PayPal, the company announced that it will add cryptocurrency payments and transfers in 2021. Once that happens, it could cement Bitcoin’s reputation as a payment and remittance mechanism.

Transactions through PayPal and other centralized platforms could even become one of the ways Bitcoin can be scaled to a mainstream user base. Centralized transactions (along with other methods like sidechains and Lightning Network) could be used to reduce the congestion on the Bitcoin blockchain so that they can only be used for larger transactions that require more security, transparency, or immutable proof of ownership.