PayPal Makes Swift Moves as It Seeks to Acquire Crypto Custodian BitGo

UTC by Bhushan Akolkar · 3 min read
PayPal Makes Swift Moves as It Seeks to Acquire Crypto Custodian BitGo
Photo: PayPal

Sources familiar with the matter said that the two companies are currently holding talks and could make an announcement soon. The acquisition is likely to give PayPal a major lead in the crypto trading market going ahead.

Just two days after online payments giant PayPal announced its decision to offer crypto trading services, there’s yet another news in the market. Citing familiar sources, Bloomberg reported that PayPal Holdings Inc (NASDAQ: PYPL) is looking ahead for the acquisition of crypto custodian BitGo.

The anonymous sources also reported that the companies might soon an agreement in the upcoming weeks. Founded in 2013, BitGo has emerged as the market leader is a multi-signature custodian. Over the last few years, BitGo has successfully managed to secure investments from big players in traditional finance.

In 2018, BitGo raised $15 million in a funding round led by Galaxy Digital and Goldman Sachs Group Inc (NYSE: GS). The same year, the company managed to raise a total of $58.9 million. As a market leader, BitGo has also specialized in offering offline storage vaults for Bitcoin and other cryptocurrencies. It is also one of the first companies offering crypto custodian services to institutional players. Coming back to the news, the Bloomberg report notes:

“PayPal has been holding talks with BitGo, a company that helps investors store Bitcoin securely, and could reach a deal within weeks, the people said, asking not to be identified because the matter is private. Talks could still fall apart and PayPal could opt to buy other targets, the people added”.

There’s currently no information on how much PayPal is willing to pay for the acquisition deal.

PayPal Making Swift Moves

The American multinational payments giant looks all set for offering crypto trading services to its global customers. Initially, PayPal will roll-out these services in the U.S. market in the coming weeks. However, it plans to bring its services to the global market by early 2021.

During this announcement, PayPal said that it would launch its services in partnership with the Paxos Trust Company. Paxos holds a regulatory license for offering cryptocurrency products and services from NYDFS.

PayPal’s entry in the crypto space has already brought huge optimism to the market. Soon after the announcement, the Bitcoin price surged above $13,000 the same day. Market analysts are hopeful that PayPal’s entry to the crypto market will attract other big financial players to the crypto market.

Besides, some believe that this will also force global banking institutions to offer support and services to crypto firms. The regulatory environment has been tilting towards crypto markets over the last few months. The U.S. OCC recently gave a green light to all registered banks to offer custodial services to crypto firms.

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