Toward the ending of 2020, financial experts predicted that the adoption of cryptocurrencies by the mainstream would evolve, evidenced by the surge in price and acceptance of Bitcoin as an inflation hedge.
Since the start of the year, fintech companies such as PayPal, Square, Mastercard, Visa, and others have shown exposure to cryptocurrencies. The latest to join those ranks is Venmo.
A Sudden Mad Dash To Support Crypto
Strategic Crypto-related investments and initiatives by these firms have created a growing widespread acceptance among users who would have found it difficult to invest in cryptocurrencies.
After adding crypto features on their respective apps, Square and PayPal have allowed crypto trading on their mobile apps. Cash App started trading Bitcoin in 2017. It is on track to realize over $100 million of annualized gross profit from only Bitcoin trading. Although this is less than 5% of Cash App gross profit annually, it’s an important step in the mainstream acceptance of cryptocurrencies.
In October 2020, PayPal added similar features to its payment platform allowing its users to trade, buy, and hold. The company launched crypto functionality for its 29 million merchants starting from the US in the late first quarter of the year.
Related Reading | Bitcoin Rebounds as PayPal Rival Buys $170M BTC; Boom Ahead?
Also, Venmo, a company under PayPal launched its Crypto on Venmo in April 2020. The new feature is meant to allow Venmo’s over 70 million users to buy and sell crypto while also sharing their crypto journey.
It appears that despite the significant price volatility, little public knowledge, limited regulation, and the lack of ease of use of crypto with retailers, crypto is still poised to go mainstream. Thousands of cryptocurrencies now exist trading on different blockchains. Stablecoins pages against fiat currencies have also seen acceptance because of their relatively low volatility.
Bitcoin rebounded the moment the Venmo news was revealed | Source: BTCUSD on TradingView.com
What’s The Next Major Brand To Make The Bitcoin Pivot?
Fintech has been shaken up by Coinbase recent listing on Nasdaq. The company’s massive Q1 2021 results provided insights into how much people were investing and trading in crypto. Indicating an inflection point where the next wave of fintech startups may be tied to and digital assets.
Hence, there are two things to consider: will more fintech firms pivot to support crypto?; Which firm will be the next crypto payment platform?
On the first question, it is clear that more investors are willing to put their money in fintech firms in the crypto space. This is obviously due to the surge in cryptocurrencies prices and adoption since the start of the pandemic. Many retail and institutional investors have bought Bitcoin or some other forms of cryptocurrencies as the greenback plunged and BTC price took off.
Chainalysis Chief Economist Phillip Gradwell told The Exchange at the time of Coinbase’s valuation that:
“Coinbase’s $100 billion valuation today demonstrates that venture investors can make great returns from putting money into crypto companies, not just cryptocurrencies. That proof point is good for the entire ecosystem.”
Though the fear of price volatility is constant, it’s become much more clear that the price stability of BTC and other cryptocurrencies will grow as more people hold and transact in digital assets.
Related Reading | 77 Million Users Can Now Share Bitcoin As Venmo Adds Crypto Payments
As the payment giants get into the crypto space, it’s expected that growing acceptance of crypto in the mainstream will pressure other fintech firms to integrate crypto into their platforms.
Sophie Guibaud, Chief Growth Officer, OpenPayd told Fintechmagazine that
“The cryptocurrency space is no longer just about what’s happening on the exchanges. Instead, the leaders are going upstream—gaining access to federal banking infrastructure and building out new payments and accounts products that will help them address much broader markets.”
Who’s next is uncertain. What can be said is that other fintech firms may be undertaking a survey to determine how other fintech firms who have integrated crypto are doing.
Regulation may also be a hurdle. US legislation may provide restrictions for fintech firms in the US market. However, since digital currencies have no geographic boundaries, the possibilities for adoption is boundless.
Featured image from Pixabay, Charts from TradingView.com