PayPal’s Crypto Holdings Increased 56% in Q1 2023 to Nearly $1B

In a recent quarterly report filed by PayPal reveals its cryptocurrency holdings to the United States Securities and Exchange Commission. PayPal’s Crypto assets make up 77.9% — up more than 10% from 2022’s reported fourth-quarter liabilities.

PayPal’s CryptoIncrease of Holdings By 56% Nearly $1B

PayPal was acquired by eBay in October 2002 for $1.5 billion. Later in 2015, PayPal was separated as an independent company but it is used by eBay. PayPal allows payments for goods and services with cryptocurrency. It will go for more streamlined transactions that will involve fewer fees and intermediaries.

PayPal supports 4 currencies with a major hold by Bitcoin and ETH

PayPal supports 4 different types of cryptocurrencies. Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. Bitcoin holds the largest share of $499 million which is up from $291 million in PayPal’s crypto assets. ETH holds $362 which is also up from the previous $ 250 million. The company is allowed to sell and buy crypto from October 2020. Not to forget that $82 million is made of Bitcoin Cash and Litecoin which was previously $63 million.

A statement quoted “As of March 31, 2023, the Company has not incurred any safeguarding loss events, and therefore, the crypto asset safeguarding liability and corresponding safeguarding asset were recorded at the same value.”

This clarifies that PayPal inspects its crypto assets as a safeguarding liability due to the dangers associated with cryptocurrencies. This also shows that the currencies held by PayPal will remain unchain. And, it has since last quarter. The third-party holding companies will hold the assets of PayPal customers. This is realized by PayPal as being a liability for the customers. Because third parties are unable to process the transactions.

PayPal’s profitability also increased in the first quarter. On a generally accepted accounting principles (GAAP) basis the company reveals per-share earnings of $0.70 up from $0.43 in the first quarter of 2022. On a non-GAAP basis, PayPal’s per-share earnings were $1.17 up from $0.88 in the first quarter of 2022.

The company’s payments volume rose 12% on a forex-neutral basis to $354.5 billion in the first quarter that ended on 31st March. The payments firm earned a profit of $1.17 per share on an adjusted basis in the first quarter, compared with 88 cents last year.

For PayPal’s Crypto, Paypal also suggested that it will lay off 7% of its workforce, which is nearly 2000 employees, in circumstances of high-interest rates. This has created fears about the upcoming recession.

Adjusted operating margin in the first quarter came in at 22.7% compared with 20.7% last year. The company said it now expects full-year adjusted profit to grow 20% to $4.95 per share, above analysts’ average estimate of $4.88 per share, according to IBES data.