Digital payments star PayPal has only been in the crypto game for a little more than a year. Together with its popular consumer payments app Venmo, the company launched a platform in early 2021 that enabled users to invest in popular cryptocurrencies such as Bitcoin and Ethereum.
But as brief as the company’s foray into crypto trading has been, some industry voices are confident that it’s likely to make its exit from the controversial currency in the near future. That is, if its latest investor Elliott Management has anything to say about it—and as the activist hedge fund is now one of the company’s top five shareholders, it seems likely that it will get its way.
The reason for PayPal’s expected turn away from crypto lies not in any anti-crypto sentiment from its new shareholder, but rather, the company’s recent slashed earnings projections and 60% tumble in stock price. As a means of turning around this downturn, Elliott Management has suggested focusing on proven profit-makers like traditional digital payment services in lieu of crypto functionality.
“Our checks suggest that PayPal’s marketing spend and M&A integration costs can be more efficient,” said Darrin Peller of Wolfe Research. To increase that efficiency, PayPal crypto investments may indeed be on their way out.