New Survey Shows How Bitcoin Is Giving PayPal a Boost

Just three weeks after PayPal  (PYPL) – Get Report began allowing all of its U.S. users to trade Bitcoin, it looks like a substantial fraction of its user base has already taken the company up on its offer.

Mizuho Securities recently surveyed 380 U.S. PayPal users, and found that 17% of them have already traded Bitcoin via their PayPal accounts. In addition, 65% of those who had traded Bitcoin via PayPal said that they’re willing to use the cryptocurrency to buy goods and services.

What’s more — though this number is influenced by the fact that Bitcoin traders appear to be more active PayPal users to begin with — those trading Bitcoin via PayPal were said to be using the PayPal app more than three times as much as non Bitcoin-traders. And about half of the Bitcoin traders reported using other PayPal functions more after they started trading Bitcoin.

There are some parallels here with how Square’s  (SQ) – Get Report Cash App — the top rival to PayPal’s Venmo platform — has used its support for low-margin Bitcoin transactions to drive greater engagement for other Cash App services. In Q3, Square’s Cash App revenue rose 174% annually to $435 million when excluding Bitcoin transactions, and 574% to $2.07 billion when including them.

For his part, Mizuho analyst Dan Dolev thinks that enabling Bitcoin transactions, together with the impact of Bitcoin trading on broader PayPal engagement, could allow PayPal to deliver 20% revenue growth in 2021.

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