How Might Bitcoin Be a Future Threat to PayPal?

Almost everyone has been enamored with Bitcoin (COIN), and the blockchain technology that powers it is intriguing. Since we have no reason to be unhappy with the bulls (optimists) of Cryptocurrencies such as Bitcoin, the exchange rate of this currency in USD or its value is still up for debate.

In light of this, we don’t see Bitcoin as a threat to companies who develop digital payment technologies but rather as a potential source of economic growth for them. Even though businesses and merchants may vary from Bitcoin’s extreme volatility and wait for the digital currency to display more realistic trade ranges (store of wealth), studies have shown that up to 60% of shops may be ready to adopt Bitcoin as an alternative to US dollars. You can get more details at

Bitcoin Holdings

That’s a relatively high amount. Probably, retailers were also affected by the sharp increase in bitcoin holdings, but this might only be the beginning of the technology’s wider use. Before trust can be established, awareness is necessary, and most people worldwide are already aware of the advantages of cryptocurrencies and blockchain technology.


Although Square (SQ) may have been one of the first companies to accept bitcoin technology, we believe that, if they haven’t already, additional online payment technology companies, like PayPal, will soon begin to see cryptocurrencies as an expansion of their business models.

Many people might need to be made aware that PayPal began integrating Bitcoin into its services in 2015, far in advance of the most recent cryptocurrency frenzy that enthralled much of the market. There might be better ideas than going full-steam ahead with cryptocurrencies, as PayPal has noted that the price volatility of some cryptocurrencies, like Bitcoin, might entirely wash out a merchant’s profit margin on a sale.

Companies typically prefer to remove currency risk from their operations. Given the significant fluctuation in the supermarket of funds from every transaction, the acceptance of Bitcoin by merchants and enterprises at this time may increase the chance of their operations.

How Is Square Benefiting Bitcoin?

Although Square is adopting a more open approach to accepting Bitcoin, PayPal isn’t doing anything either (or at least it receives more coverage). The central argument we’re attempting to make is that, given the hoopla surrounding crypto assets, online payment technology is increasingly becoming popular rather than the possible growth of Cryptocurrencies like bitcoin.

Consumers are becoming more familiar with digital assets despite high volatility, especially if they have previously been lost, stolen, or linked to unlawful behavior, whether fairly presented or not. This contrasted with decades ago when many consumers were even wary of credit cards.

The use of digital payment technology is the norm for the younger generation. Everything already appears to be digital, but it’s not, whether one is making purchases through Amazon (AMZN), using a Square reader at a store, or transmitting money through PayPal.

PayPal Cash Flows

A true cash-flow generating behemoth, PayPal. The business has produced an operational cash flow of more than $2.5 billion over the last three fiscal years, surpassing the $3.1 billion threshold in fiscal 2016. 

The amount of free cash flow, calculated as cash flow from operations less total capital spending, has also been significant, coming in at or above $1.8 billion each of the previous three years and close to $2.5 billion for fiscal 2016. 

Due to its capital-light business model and ongoing scale expansion, PayPal can disperse costs across an ever-growing client base. In addition to having a comparative edge, PayPal is invested in the long-term expansion of e-Commerce, online payments, and related technology.

While we are somewhat worried about the loss of revenue with eBay in 2023, we believe that Bitcoin and other digital currencies may present a greater chance than a risk. Considering the current year-over-year GDP growth in total payments volume, PayPal may even wholly replace that business in months. At this point, we see the partnership with eBay as a lovely rather than a necessity, and we trust the two businesses can agree to at least offer PayPal as a payment option.

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