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PayPal Sees Crypto Trading Volume Surge, Doubling the Previous Record

Sara Zhang

Summary: Bitcoin prices saw a heavy correction of around 20 percent from the recently achieved peak yesterday. But, because of that, payments giant PayPal who serving 340 million customers worldwide has hit a new record in cryptocurrency transaction trading volumes. According to data from Nomics, PayPal has set another record with its cryptocurrency transactions on Monday ...

Bitcoin prices saw a heavy correction of around 20 percent from the recently achieved peak yesterday. But, because of that, payments giant PayPal who serving 340 million customers worldwide has hit a new record in cryptocurrency transaction trading volumes. According to data from Nomics, PayPal has set another record with its cryptocurrency transactions on Monday as $242 million in the digital currency changed hands, which has broken and doubled the previously set record of $129 million a week earlier.

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Source: Nomics

On Twitter, Alex Saunders, a popular account in the Australian crypto community, pointed out that PayPal doubled its previous crypto trading volume record yesterday, the day BTC’s price started recovering, by looking at the trading volume of cryptocurrency exchange itBit, the institutional-grade crypto exchange launched by Paxes that PayPal uses.

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The crypto currencies that PayPal allows to trade are actually custodied by itBit. Those itBit volumes thus reflect what is going on at PayPal.

Most of the trading volume, data shows, was on the BTC/USD pair, while a significant portion was also for ETH. itBit has trading pairs for BTC, ETH, LTC, and BCH – the four cryptoassets PayPal lets its users buy – and for Paxos Gold (PXG). Trading volume for the latter, it’s worth noting, was negligible.

During the sell-off bitcoin addresses with over 1,000 BTC – so-called “whales” – kept on growing, while those with 0.1 BTC or less dropped, implying large investors kept accumulating and retail investors sold their funds.

To some analysts, including Lark Davis, the sell-off was shorted by whales who then took advantage of lower prices to gobble up funds retail investors panic-sold. The analyst warned investors they should avoid becoming “whale food.”

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However, it is not clear if the volumes were due to the increase in purchases during the dip, or traders were selling their holdings in a panic with the fall of prices. Whatever may be the reason, the crypto markets recovered following the news of the surged PayPal volumes.

It’s worth noting the direct involvement of PayPal with digital currencies came last year. PayPal announced in October of last year it would allow its customers to “buy, hold and sell cryptocurrency directly from their PayPal account.”  But the itBit volumes reflect what is going on at PayPal, with it seeing significant growth and in a very short time. Such volumes started off at $20 million in November, crossing $100 million in December, and now are nearing $250 million as the public starts investing in bitcoin once more.

Furthermore, PayPal plans to “significantly increase cryptocurrency’s utility by making it available as a funding source for purchases at its 26 million merchants worldwide.” Besides, although only users in the U.S. can currently buy bitcoin with PayPal, the payments firm plans on rolling out the service globally in the future. 

These moves were encouraged across the entire crypto industry and seen as the mainstream adaptation of cryptocurrencies. Meanwhile, PayPal is investing in cryptocurrency startups and recently gained a stake in crypto tax automation startup Taxbit on January 7.

By Sara Zhang

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