- May 11, 2023
- Posted by: [email protected]
- Category:
PayPal, a fintech company, disclosed its cryptocurrency holdings in a recent quarterly report filed with the SEC. As of March 31, 2023, PayPal claimed a combined total of $943 million in cryptocurrency assets, a 56% increase from the previous quarter’s reported $604 million. Bitcoin (BTC) and Ethereum (ETH) account for the lion’s share of the company’s cryptocurrency holdings, with $499 million and $362 million, respectively, indicating a 56% rise since Q4 2022. Bitcoin Cash and Litecoin make up the remaining $82 million.
PayPal’s reported total financial liabilities for this quarter were $1.2 billion, with crypto assets making up 77.9% of the liabilities, a 10% increase from the previous quarter. PayPal considers its crypto assets a “safeguarding liability” due to the unique risks associated with cryptocurrencies. The company allows its customers in certain markets to buy, hold, sell, receive, and send cryptocurrencies, including Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. However, custody of these assets remains limited to third-party holding companies, which presents a liability for customers in the event that third parties are unable to process transactions.
Despite this liability, as of March 31, 2023, PayPal had not experienced any safeguarding loss events, therefore the crypto asset safeguarding liability and corresponding safeguarding asset were reported at the same value. Because the corporation realizes the possible hazards related with cryptocurrencies, it regards them as a safeguarding liability.
In addition to its cryptocurrency holdings, PayPal’s profitability increased in the first quarter. On a GAAP basis, the company disclosed per-share earnings of $0.70, up from $0.43 in the first quarter of 2022. On a non-GAAP basis, PayPal’s per-share earnings were $1.17, up from $0.88 in the first quarter of 2022.
Overall, PayPal’s cryptocurrency holdings have increased significantly in the first quarter of 2023, with Bitcoin and Ethereum being the largest holdings. The company recognizes the risks associated with cryptocurrencies and considers them a safeguarding liability. Despite this, PayPal has not incurred any losses as of March 31, 2023. Additionally, the company’s profitability increased in the first quarter of 2023 compared to the same period in 2022.
