11-13-2020, 07:30 PM
PayPal buys and holds actual BTC on your behalf
<!-- SC_OFF --><div class="md"><p>I've seen a ridiculous amount of comments about how PayPal has fractional reserves and some people saying they don't hold any BTC.</p> <p>There are plenty other issues with PayPal (freezing accounts and unilaterally increasing fees) but this post will address why they genuinely would hold actual BTC.</p> <p>Disclaimer: I don't like PayPal and still won't buy through them so this isn't a shill post.</p> <p>RISK VS REWARD</p> <p>By holding BTC they make money everytime you buy and sell. Additionally, they only have to trade occasionally (someone buying and someone else selling cancels out, meaning they don't even need to move any coins but make profit both ends). Doesn't matter if bitcoin goes up or down, they make money.</p> <p>IF they didn't hold BTC, they save money by not having to purchase anything at all (100% profit) but if the price ever goes up and people cash out, they are now liable for huge losses.</p> <p>This isn't some sleezy exchange in Malta, this is a sleezy FinTech company which is publicly listed in the US and makes an insane amount on global fiat transactions.</p> <p>Yes, BTC was surprisingly popular for them but would still be a tiny fraction of their global transactions.</p> <p>It would make no sense to put the rest of the company at risk over a highly volatile commodity which nets them easy profits just by holding it.</p> <p>They would also open themselves up for plenty of litigation and possible jail time if BTC hits 100k and everyone tries to sell.</p> <p>TLDR; PayPal make big money on spread, no try exit scam, still shitty company but maybe good for grandma use.</p> </div><!-- SC_ON --> Kind Regards R
<!-- SC_OFF --><div class="md"><p>I've seen a ridiculous amount of comments about how PayPal has fractional reserves and some people saying they don't hold any BTC.</p> <p>There are plenty other issues with PayPal (freezing accounts and unilaterally increasing fees) but this post will address why they genuinely would hold actual BTC.</p> <p>Disclaimer: I don't like PayPal and still won't buy through them so this isn't a shill post.</p> <p>RISK VS REWARD</p> <p>By holding BTC they make money everytime you buy and sell. Additionally, they only have to trade occasionally (someone buying and someone else selling cancels out, meaning they don't even need to move any coins but make profit both ends). Doesn't matter if bitcoin goes up or down, they make money.</p> <p>IF they didn't hold BTC, they save money by not having to purchase anything at all (100% profit) but if the price ever goes up and people cash out, they are now liable for huge losses.</p> <p>This isn't some sleezy exchange in Malta, this is a sleezy FinTech company which is publicly listed in the US and makes an insane amount on global fiat transactions.</p> <p>Yes, BTC was surprisingly popular for them but would still be a tiny fraction of their global transactions.</p> <p>It would make no sense to put the rest of the company at risk over a highly volatile commodity which nets them easy profits just by holding it.</p> <p>They would also open themselves up for plenty of litigation and possible jail time if BTC hits 100k and everyone tries to sell.</p> <p>TLDR; PayPal make big money on spread, no try exit scam, still shitty company but maybe good for grandma use.</p> </div><!-- SC_ON --> Kind Regards R