PayPal's announcement this week that it will support cryptocurrency has set off fresh speculation about the company's next moves. Within days of the news, Bloomberg reported that PayPal is in talks to
PayPal's announcement this week that it will support cryptocurrency has set off fresh speculation about the company's next moves. Within days of the news, Bloomberg reported that PayPal is in talks to acquire BitGo, a digital asset custodian. The report, citing people with knowledge of the discussions, suggests BitGo is one of several crypto firms PayPal has targeted.
Bitcoin's price surged to $13,250 on the heels of PayPal's declaration, marking a 15-month peak.
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Carol Massar, host of Bloomberg Businessweek, tweeted that "PAYPAL SAID TO BE IN TALKS TO BUY CRYPTO FIRMS INCLUDING BITGO."
The interest in BitGo makes operational sense. PayPal wants to roll out cryptocurrency features to its users, and it needs a custodian it can trust to hold digital assets on their behalf. BitGo, founded in 2013, has spent years building out institutional custody infrastructure. Binance and Nexo both use the platform.
In 2018, BitGo raised $15 million in a funding round backed by Galaxy Digital and Goldman Sachs.
According to Bloomberg's sources, PayPal and BitGo could reach a deal within weeks. The discussions remain unfinished, though, and if the two companies can't agree on terms, PayPal will explore other custodians.
The potential acquisition has divided the crypto community. Thorchain flagged a concern: BitGo custodies the majority of wrapped Bitcoin, the WBTC token that lets people trade Bitcoin on other blockchains. If PayPal buys BitGo, a traditional finance company gains control of a critical point in that system.
Thorchain's Twitter account put it this way: "There goes WBTC. The majority of wrapped Bitcoin is custodied by BitGo. PayPal is not a good actor in this space. Position accordingly."
MiningPool content is intended for information and educational purposes only and does not constitute financial, investment, or legal advice.
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