Blog Post 3/5
Yesterday, PayPal’s CEO formally announced that it plans to incorporate a larger variety of cryptocurrency into its platform. As of now, PayPal accepts four of the main cryptocurrencies but it wants to add more. Since PayPal is already a digital wallet, it makes a lot of sense that they are heavily investing into cryptocurrency which is also a digital wallet. Now, anyone that has a PayPal account is able to purchase cryptocurrency and easily participate in the mania.
Although using PayPal might remove some of the anonymity of cryptocurrency, it is a great advancement towards legitimacy for the field. One of the reoccurring themes that skeptics love criticizing is the legal side. Critics say that cryptocurrency is a dangerous asset and potentially a bubble because few governments have yet made any statements about its legitimacy. India was one of the first governments to “ban” cryptocurrency and render its use illegal. This happened a few weeks ago, now it will be interesting to see how they will try to enforce it and to what extent it is possible.
Tesla and PayPal’s adoption of cryptocurrency is great news for those involved in cryptocurrency and also great for its narrative. As important companies continue to adopt this new form of currency, it will be very interesting to see how governments react, especially the United States. As of now, you are required to report your capital gains on cryptocurrency to the IRS. However, as we know, it is very difficult to trace currency on the blockchain and reporting capital gains will therefore be entirely up to the individual. I am very eager to see how the IRS handles this situation this April, especially because of the parabolic trends in cryptocurrency over the past year (nearly $1 Trillion entered into the market this past year).
The recent emergence of cryptocurrency throughout various sectors combined with uncertainty about its legitimacy poses a dilemma for other large companies and individuals. On one hand, there is a fear of missing out on this new global trend and not investing into cryptocurrency could put you at a serious disadvantage. On the other hand, there is the fear of illegitimacy and of loosing lots of money if the governments renders its use illegal. Meanwhile, companies and individuals are making enormous amounts of money. While the “barrier to enter into the market” used to be true, there should be almost no worry in this area anymore (fear of being scammed on the internet or having to access shady websites) with PayPal. If I have any advice to the reader, diversify your assets and definitely do not sit on the sidelines during this mania!