- PayPal's cryptocurrency holdings decreased in the third quarter.
- The fintech giant's Bitcoin and Ether holdings fell despite a quarter-over-quarter increase in prices.
- Retail interest may not have kept pace with institutional penetration.
Online payment giant PayPal on Tuesday reported a decline in its cryptocurrency holdings.
The amount of cryptocurrencies PayPal holds on behalf of its customers fell about 11% from the second quarter to the third quarter, to about $2.17 billion, according to a filing with the U.S. Securities and Exchange Commission.
The dollar value of the company's Bitcoin holdings fell by 1% from June 30 to September 30, even as the price of the world's largest cryptocurrency rose 8% during the same period.
Similarly, PayPal's Ether holdings plunged 27%, outpacing the cryptocurrency's 22% price decline.
In addition to Bitcoin and Ether, the fintech giant allows customers to buy and sell Bitcoin Cash, Litecoin, and its own stablecoin, PayPal USD.
PayPal also reported that the dollar value of the three cryptocurrencies it holds has also fallen.
Retail, institutional
PayPal's crypto trading products target small-wallet retail customers, and the decline in PayPal's crypto holdings is at odds with increased institutional interest in Bitcoin over the past year.
About $23.3 billion has flowed into financial institutions since the launch of the Spot Bitcoin exchange-traded fund in the U.S. in January, according to Soso Value.
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Spot Bitcoin ETFs allow investors to gain exposure to cryptocurrencies from traditional brokerage accounts.
The total number of institutional investors with positions in Bitcoin ETFs increased by 14% from the first quarter of this year to the second quarter, according to an August memo from Bitwise Chief Investment Officer Matt Hogan.
“Different institutions are emerging and growing in size,” he wrote.
In contrast, the retail market's interest in cryptocurrencies is debatable.
According to Google Trends, search interest for the term “Bitcoin” in October of this year was down 82% from its all-time high in December 2017.
Further signs of retail interest will emerge after Robinhood and Coinbase release their own quarterly reports on Wednesday. The report details quarterly changes in cryptocurrency trading volume on each platform.
Virtual currency market movements
- Bitcoin is trading at $72,139, up 1.7% in the past 24 hours.
- Ethereum rose 2.1% to trade at $2,667.
what we are reading
Ben Weiss is DL News' Dubai correspondent. Any tips? send him an email bweiss@dlnews.com.
