Shares of PayPal Holdings Inc. PYPL,
rose 1.2% on Thursday after BTIG analyst Mark Palmer upgraded the stock to buy from neutral, citing the pull for the cryptocurrency platform. PayPal announced in October that users will start buying, holding and selling cryptocurrencies such as bitcoin BTCUSD,
through the PayPal platform, and Palmer said Paxos, a private company that drives PayPal’s crypto efforts, “has seen its trading volumes rise impressively over the past few weeks.” He expects that ‘the vast majority’ of the volume on Paxos’ itBit crypto exchange transactions reflects transactions for PayPal customers, leading to his forecast that crypto could add $ 1 billion to PayPal’s annual revenue by 2022. ‘Rising crypto volumes bode well for the active growth and involvement of PYPL,’ he wrote. PayPal will also enable customers to make online purchases using their cryptocurrency holdings, which according to Palmer would be a cheaper financing mechanism for PayPal than when people use their service to finance online purchases with their credit cards. “The result is that the cheaper financing associated with the use of crypto in the financing of trading transactions can boost its rate and margins,” he writes, setting a $ 300 price target on the stock. PayPal shares have risen 110% over the past 12 months as the S&P 500 SPX,
achieved 16%.
