Much has been said about cryptocurrency over the past few years and it has certainly had its many ups and downs.
Over the past few months, two of the biggest companies in financial technology, PayPal and Square have taken notice and implemented measures to capitalize on the new form of payment.
PayPal joined Square in announcing it was adopting bitcoin as a form of payment beginning in early 2021, according to representatives from the company. Customers will be able to use the cryptocurrency as a way of paying for items once this new payment system is put into place.
PayPal will settle these payments through fiat currencies much like other entities, while the online payments giant also will work in partnership with Paxos.
PayPal will thus convert fiat and serve as the middleman between merchants and customers as it usually does.
PayPal will accept Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.
In addition, anyone using PayPal will have the opportunity to buy cryptocurrency through the dedicated PayPal app and have access to a special wallet for cryptocurrency.
All of this news comes after a lot of speculation and should further introduce bitcoin into the mainstream.
This also could be even more significant to online merchants which allow PayPal as a method of payment and could be a way to begin actually buying regular day to day products with cryptocurrency.
Prior to today’s PayPal announcement, popular payments platform Square decided to put $50 million dollars worth into the most prominent cryptocurrency, bitcoin, buying a total of 4,709 bitcoins.
This means that Square now has roughly 1 percent of all of its assets in the second quarter in the cryptocurrency making it a significant investment overall.
The question remains whether or not the investment will pay off and if this is another indicator that the new form of money is here to stay.
Square directly has asserted that “bitcoin has the potential to be a more ubiquitous currency in the future” and that it is “an instrument of economic empowerment”.
The company has already been accepting bitcoin payments since 2014 and this represents a step even further.
The CEO of both Twitter and Square Jack Dorsey has been an advocate for bitcoin for some time saying it will become the one currency used around the world in the near future.
Dorsey owns a large share of bitcoin already and has maintained cryptocurrency is much more than a simple investment.
“We do believe that this is a transformational technology for our industry and we want to learn as quickly as possible,” he said back in 2018.
Of course, Square has already implemented the ability to trade bitcoin in its Cash app when it created Square Crypto.
This launched a specific group within the company to contribute to all aspects related to bitcoin.
Furthermore, Square launched a nonprofit called the Cryptocurrency Open Patent Alliance this fall and it did so in order to “defend against patent aggressors”.
Square has already had great success in implementing bitcoin with revenue totalling $306 million in the first quarter of 2020.
This is reportedly an increase of 367 percent from the same quarter in 2019 and reflects increased interest by both customers and users of both financial institutions.
Bitcoin is quickly approaching $13,000 and has started to reach new highs for the year.
It is no doubt partially because of Square’s adamant support along with a general trend for cashless payments that has helped other services like PayPal, Venmo, and their competitors grow during the coronavirus pandemic.
Of course, $13,000 does not represent bitcoin’s all-time high. The cryptocurrency hit nearly $20,000 in late 2017 but has fluctuated since then due to a number of factors.
But perhaps 2020 and 2021 is truly the period for the still somewhat new method of payment to really take off.
There are a number of factors that might contribute to this in addition to companies like Square jumping on board.
The upcoming Presidential election, the passage or non-passage of another stimulus package, and the strength of the economy as the coronavirus continues on are all certainly important.
Finally, as more customers seek to move away from using contact-based payments, this should only lead to a bigger need for cryptocurrency to really mature.
$50 million is nothing to sneeze at as far as a bitcoin investment, and Square is already reaping the benefits from this and may put in even more in the near future.
Do not be surprised if some of the major e-commerce platforms like Amazon, eBay, Walmart and others start accepting the coin as a direct method of payment sooner rather than later.
Most of these e-commerce sites already accept PayPal and it would make sense for them to also consider taking similar actions as these huge online transactions merchants.
