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Breaking News: Coinbase Confirms DOJ Investigation Following Major Security Incident

PayPal Plunging Despite Increasing Crypto Holdings

Dalmas Ngetich
Dalmas Ngetich
2 years ago
2 mins read
PayPal

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PayPal share prices are plunging and currently down 80% from 2021 peaks; the largest draw down ever, market data on May 12 shows. PYPL closed the week at $61.69, down 3% from Thursday, March 11.

PayPal Shares Crumbling

Analysts observe that the decline in PayPal’s stock price has also resulted in a notable shift in its price-to-sales (P/S) ratio.

PayPal is now down 80% from its 2021 high, its largest drawdown to date.

Its price to sales ratio has moved from a record high of 17x to a record low of 2.5x.$PYPL pic.twitter.com/w9JjzPXmJb

— Charlie Bilello (@charliebilello) May 12, 2023

Previously at a record high of 17x, the P/S ratio is now at a record low of 2.5x.

The P/S ratio is a financial metric, which evaluates a company’s valuation, and compares its market capitalization to its total revenue over a specific period, typically a year.

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The P/S ratio offers valuable insights into how the market perceives a company’s revenue generation relative to its size. The ratio focuses on the rise and fall of the company’s revenue.

This ratio also signifies the amount investors are willing to pay for every dollar of the company’s revenue.

To put it into perspective, PayPal’s previous P/S ratio of 17 implies that investors are willing to pay $17 for every $1 of revenue generated by the company. Now, investors are only willing to pay $2.5 for every $1 revenue.

Paypal shares are still at a premium. A P/S ratio above 1 indicates that investors are still willing to pay a premium for the company’s revenue.

While the exact reasons behind PayPal’s downturn are not explicitly stated, speculation suggests that the company is facing a combination of intense competition and outdated technology. PayPal is one of the oldest payment processors.

As the online payment landscape is constantly evolving, it has become increasingly challenging for PayPal to wade off competitors.

For instance, banks have incorporated new systems such as Zelle. Besides, the Federal Reserve is rolling out FedNOW. There are also other avenues for users to use cryptocurrencies or even networks such as XRPL by Ripple Labs.

Some users have even compared PayPal’s level of innovation to what it was in 1999 when Western Union was its primary competition.

 

Too much competition plus outdated tech.
It's difficult to stay relevant 25 years later.
Banks now have Zelle and even the Fed is rolling out FedNOW, and they suck at innovation.
In 1999 their competition was Western Union charging you $$$.

— Patrick Dehkordi (@PatrickDehkordi) May 12, 2023

Crypto Holdings Rise In Q1 2023

This is in spite of PayPal announcing a substantial surge in its cryptocurrency holdings In Q1 2023, revealing a remarkable 56% increase compared to the previous quarter.

Related Reading

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PayPal Co-Founder Says Bitcoin Price Points To Crisis In The Economy

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As of March 31, 2023, the company boasted a total of $943 million in cryptocurrency assets led by Bitcoin and Ethereum, as opposed to the preceding quarter of $604 million; a  significant uptick in its crypto holdings.

Bitcoin Price On May 13| Source: BTCUSDT On Binance, TradingView
Bitcoin price on May 13 | Source: BTCUSDT On Binance, TradingView

Although the payment processor accepts direct crypto purchase, it bars users from withdrawing them to external wallets. This is a hindrance and a fact that may also slow down adoption.

-Featured Image From Canva, Chart From TradingView
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Dalmas Ngetich
Dalmas Ngetich

Dalmas Ngetich

Dalmas, a seasoned crypto reporter, brings a unique perspective to the industry. His specialization in NFTs, blockchain, DeFi, and blockchain news for NewsBTC, combined with a background in mechanical engineering and over a decade of experience in journalism, has allowed him to craft over 10,000 news and feature articles over the past eight years. His diverse range of topics, including technology, Forex, and finance, reflects his comprehensive understanding of the crypto landscape.

Read more

His technical expertise and analytical skills have been recognized and featured by leading news outlets such as Investing.com, CoinTelegraph, Entrepreneur, Forbes, and other authority sites. Notably, he broke key news, including the Ripple and MoneyGram partnership, cementing his position as a thought leader in crypto.
The news exploded. Over 100,000 people devoured this meticulously crafted report, from seasoned investors to curious newcomers. His analysis wasn't just dry facts and figures; it crackled with insight, dissecting the implications of the partnership and its potential impact on the future of finance.

His deep understanding of the financial markets, technological advancements, and blockchain developments has made him a respected voice in the industry.

Dalmas is also the founder of BTC-Pulse, a crypto news site, further demonstrating his commitment to the field. He firmly believes that DeFi and NFTs are here to stay and will continue to drive financial inclusion.

Coming from Nairobi, Kenya, it is easy to see the source of his inspiration: Across Africa, millions lack access to traditional banks. Remote villages, limited documentation, and high minimum balances create insurmountable barriers.

DeFi, not just Maker or Aave, for example, but think of Bitcoin and USDT, cuts out the middleman. Forget banks with their limitations.
Even so, DeFi isn't a magic solution. The continent still struggles with reliable internet access, and educational campaigns highlighting the benefits of this wonderful solution are insufficient. Moreover, even for those interested, understanding DeFi can look like learning a new language.

Dalmas is here to help make the tech easy to understand and digestible, even for beginners.
The story of DeFi in Africa is still being written. Challenges abound, but the promise of a more inclusive financial future is a powerful motivator. With innovation and collaboration, Dalmas firmly believes that DeFi could become the key to unlocking Africa's full economic potential.
This possibility and its immense value motivate Dalmas to continue breaking key DeFi innovations and more across the globe. His engineering background further enhances his ability to deliver well-thought-out pieces that blend technical insight with clear, impactful reporting.

Beyond his professional achievements, Dalmas is deeply passionate about technology and politics. Policies drive adoption, and being at the forefront and keeping up with how they evolve is crucial for the sphere to mature.

When Dalmas is not closely monitoring the latest crypto events, he can be found in nature, exploring the picturesque countryside, and traveling with his family and friends. His love for adventure and discovery perfectly complements his investigative and reporting skills.
You can connect with Dalmas on X: @Dalmas_Ngetich, or contact him on Telegram @Dalmas_Ngetich.

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Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality
Created by industry experts and meticulously reviewed
The highest standards in reporting and publishing
How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

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