PayPal’s crypto holdings are approaching $1 billion, primarily in Bitcoin and Ether
PayPal has revealed that it has nearly $1 billion in cryptocurrencies on its balance sheet, mostly consisting of BTC and ETH.
In its latest quarterly financial performance report, the financial payments giant revealed that it has $943 million worth of customer assets in bitcoin, ether, bitcoin cash and litecoin, marking an increase of $339 million from the end of last year.
PayPal reported $1.2 billion in accumulated financial liabilities for the first quarter of the year, with crypto assets making up 77.9% of that amount – up more than 10% from 2022’s reported liabilities in the fourth quarter.
“We maintain the internal record of our customers’ cryptoassets, including the amount and type of cryptoassets held by each of our customers,” PayPal said in its 10-Q filing.
The company noted that it does not hold cryptocurrencies outside of customer funds on its balance sheet.
According to the report, PayPal considers its crypto assets a “hedging liability” due to the “unique risks associated with cryptocurrencies.”
The payment provider has introduced a number of crypto features to its customers over the past few years since giving US users the ability to buy, sell and hold crypto in October 2020.
Last July, the company enabled customer transfers to third-party wallets and exchanges.
It has also rolled out crypto transfers on Venmo, the mobile payment services app, allowing customers to move holdings to external wallets and transfer crypto to others through the app.
Furthermore, the company acquired Curv, a cryptocurrency security company, in March 2021.
In late 2021, private blockchain software technology company and developer of popular crypto wallet MetaMask ConsenSys integrated a feature that allows users to purchase ether via PayPal to fund the wallet.
PayPal’s profitability increased in Q1 2023
PayPal’s profitability has also increased in the first quarter of the year.
The company disclosed earnings per share of $0.70, up from $0.43 in Q1 2022, on a generally accepted accounting principle (GAAP) basis.
On a non-GAAP basis, PayPal’s earnings per share were $1.17, up from $0.88 in the same period.
However, overall PayPal growth slowed over the past year as countries around the world lifted restrictions and macroeconomic conditions worsened.
PayPal also had to take some measures to reduce costs amid the current global market rout.
Earlier this year, the company said it has reduced its workforce by 7%, or about 2,000 employees, as part of ongoing efforts to “strengthen” and “reshape” in a “challenging macroeconomic environment.”
Meanwhile, the company has warned that its adjusted operating margin will not grow as fast as the company previously expected, even after costs on its platforms rose more than expected in the first quarter.
The news sent the company’s stock crashing, ending the last trading day on Tuesday down 12.73%. The company’s shares are down 7.46% YTD.
