PayPal (NASDAQ:PYPL), the money transfer and digital wallet provider, has been involved with the cryptocurrency market for some time.
For example, in 2020, the company allowed Venmo digital wallet users to buy, sell, hold, and otherwise transact in four digital currencies: bitcoin, bitcoin cash, ethereum, and litecoin. PayPal is adding to its crypto portfolio; earlier this week, ConsenSys — the parent company of MetaMask — announced a partnership with PayPal to more efficiently purchase ether on PayPal and move the second-largest cryptocurrency to MetaMask.
Financial terms of the deal weren’t disclosed, but there are potential benefits for both sides in the partnership. MetaMask is the first Web3 wallet to tap into PayPal technology, and that could ease users’ Web3 experience.
Additionally, the familiarity and trust behind the PayPal brand could encourage more MetaMask users to use the fintech platform to purchase ether. PayPal has nearly 430 consumer and business accounts across roughly 200 markets, indicating that the potential is massive for MetaMask, depending upon various expansion efforts.
“This integration with PayPal will allow our U.S. users to not just buy crypto seamlessly through MetaMask, but also to easily explore the Web3 ecosystem,” said Lorenzo Santos, MetaMask product manager, in the statement.
While it’s clear that PayPal is bolstering its crypto offerings, it’s also clear that it will be a while before investors develop enthusiasm for such moves, as the stock is down 6% this week. Year-to-date, PayPal is off 63%, largely the result of crypto-correlated equities faltering amid the backdrop of the “crypto winter.” As such, there may be value in the stock today for risk tolerant investors.
“Our fair value estimate for PayPal to $135 per share, which equates to 28.6 times our projected 2023 adjusted earnings per share,” . “While growth has slowed a bit in 2022 as the company works past some headwinds and the company could face additional headwinds if the economy worsens, we think PayPal has a clear path to strong growth over the next few years and that it can continue to generate solid growth over the long haul as it rides the secular shift toward electronic payments generally and e-commerce and mobile payments more specifically."
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