October 23, 2020
By Sam Grant
Just days after making an announcement that made waves in the crypto space, rumours have emerged that PayPal is looking for crypto companies to buy
This week’s headlines have largely been around PayPal and its latest announcement of providing support for crypto. The excitement resulting from the news saw Bitcoin’s price explode to a 15-month high of $13,250.
PayPal is rumoured to be interested in acquiring crypto custodian BitGo. A report emerging from Bloomberg suggests that BitGo is only one of the crypto firms that PayPal is eyeing. According to those familiar with the discussions, the deal is yet to be finalised.
Bloomberg Businessweek’s host Carol Massar yesterday sent a tweet reading,” *PAYPAL SAID TO BE IN TALKS TO BUY CRYPTO FIRMS INCLUDING BITGO.”
The interest particularly in BitGo is not baseless, as PayPal needs a premium custodian service to handle the crypto features it is introducing. What better option is there than BitGo — one of the oldest institution-oriented platforms that provides clients with customised custodial services?
BitGo was established in 2013 and currently serves several companies in the cryptocurrency sector, including Binance and Nexo. BitGo raised $15 million in a funding round in 2018, secured with the support of Galaxy Digital and Goldman Sachs.
Anonymous sources in the Bloomberg report asserted that PayPal and BitGo will likely conclude the deal in a few weeks’ time. There is also a possibility that the deal might not go through if the parties don’t reach an agreement, in which case PayPal will consider other alternatives.
The crypto community has expressed different reactions to the rumours of PayPal’s potential acquisition. Thorchain’s official Twitter account reacted to the subject with concerns on the decentralization of Wrapped Bitcoin, since the majority of Bitcoin held in the protocol is reserved by BitGo.
A tweet from the account read, “There goes WBTC. The majority of wrapped Bitcoin is custodied by BitGo. PayPal is not a good actor in this space. Position accordingly.”