Victor Ugochukwu · Dec 14, 2020 . 5min read
PayPal is out on crypto firm shopping, in talks with BitGo
By this move, PayPal would strengthen its chance of offering crypto custody services to its growing list of customers.
By Victor Ugochukwu · Oct 24, 2020 . 6min read
Payment giant PayPal as a way to live up to its reputation of doing big things is considering acquiring some crypto firms in its recent foray into cryptocurrencies. According to a recent Bloomberg report, PayPal is already in talks with crypto custody firm BitGo and may be acquiring it.
PayPal has been holding talks with BitGo, a company that helps investors store Bitcoin securely, and could reach a deal within weeks
Based on the records of those familiar with the deal, no final decision has been reached just yet and that
Talks could still fall apart and PayPal could opt to buy other targets
By this move, PayPal which recently added support for cryptocurrencies is looking to harness the strategic strengths of BitGo as one of the big platforms out there that serve institutions and hedge funds in areas of multi-sig wallets as well as cold wallets.
Mike Belshe established BitGo in 2013 and has several big customers under its belt. It also recently applied for a license under the New York State Banking Law. This will effectively permit it to operate within the jurisdiction as a custodian for cryptocurrencies for holders.
The last public valuation for Bitcoin was $170 million when it raised $58.5 million then. Top investors like Goldman Sachs, Craft Ventures and Digital Currency Group back the Californian-based company, BitGo. DRW, Galaxy Digital Ventures, Redpoint Ventures, Valor Equity Partners and Founders Fund are also investors in BitGo.
PayPal set to compete against Coinbase with BitGo and other cryptocurrency firms acquisition.
As PayPal moves to acquire crypto firms even in the area of custody, it looks like it’s set to wrestle with unicorns like Coinbase in its own turf. The latter also ranks among the top cryptocurrency exchange platforms in the world. Coinbase also has Coinbase Custody, a platform servicing significant funds to help maintain its assets in cold storage. Coinbase had consolidated its position as a cryptocurrency custody provider when it acquired Xapo for $55 million in 2019.
If the PayPal – BitGo deal eventually works out, the fintech giant will have more fire added to its competition fuel. Moreover, PayPal boasts of a whopping 322 million customers scattered around 200 countries and regions. On another note, PayPal’s recent move into cryptocurrencies was in partnership with Paxos; another growing crypto custody provider.
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