PayPal could see its revenue increase by $2 billion, thanks to cryptocurrency services. This was revealed in an analysis by Mizuho Securities.
Analyst Dan Dolev is also very optimistic about PayPal’s stock price, which could rise from $290 to $350.
Specifically, the analysis is based on the fact that PayPal recently revealed that 50% of its users use the app at least once a day. According to Mizuho Securities, the majority of users are indeed Bitcoiners.
This very data leads Dan Dolev to believe that by 2023 PayPal will see its revenue grow by $2 billion, 10% more than the estimated forecast for the same period.
Dan Dolev explained:
“Both our survey and management commentary unveil a dramatic increase in engagement due to crypto”.
PayPal and cryptocurrencies
PayPal announced its cryptocurrency buying and selling service in October 2020. The service is currently only active in the US, although the company plans to expand it to other nations. PayPal’s openness to cryptocurrencies helped trigger Bitcoin’s rally, which has experienced vertical growth since October, breaking record after record.
Bitcoin is currently worth $36,000. However, this growth has also been boosted by the entry of institutional investors, starting with MicroStrategy, which announced in August that it had adopted Bitcoin as its primary reserve.
In the meantime, PayPal’s (PYPL) stock has doubled in value in a year, rising from $115 to $240 today. At the beginning of 2021, it was worth $231.
According to analysts at Wedgewood Partners, forecasts for 2021 are optimistic:
“PayPal continued its torrid pace of payment volume growth, up +38% during the quarter, driven by over 15 million new accounts (almost double the pre-pandemic rate) and continued increases in transactions per account. This led to +25% growth in revenue and hefty margin expansion as the Company continues to effectively leverage its fixed cost base. PayPal’s addressable market continues to be a multitrillion dollar opportunity, with the Company particularly focused on the faster growing and more lucrative e-Commerce channel”.
This will also be driven by Bitcoin, all the more so if the price remains at peak levels