Cryptocurrency
Fintechs are moving into bitcoin, but expect crypto startups to stay on their home turf
As reported at The Block, “Square, SoFi, and soon PayPal. “The list of financial technology companies that have jumped on the crypto bandwagon continues to grow. And it makes sense — fintechs stand to cash in on such offerings, which can be more profitable than stock trading offerings, in some instances. It also provides fintechs […]
As reported at The Block, “Square, SoFi, and soon PayPal.
“The list of financial technology companies that have jumped on the crypto bandwagon continues to grow. And it makes sense — fintechs stand to cash in on such offerings, which can be more profitable than stock trading offerings, in some instances. It also provides fintechs with a way to expand their client base. Square’s Cash App provides a great example of what a crypto offering can mean for a fintech company.
“Earlier this week, Square’s second-quarter earnings were prematurely released, showing that it made $875 million in bitcoin revenue via Cash App. Cash App generated $17 million in bitcoin gross profit for the same period. Square’s filing indicates total expenses related to its bitcoin offering as $858 million.
“Such breakneck growth explains why PayPal wants to get in on the action. The firm is reportedly working with crypto firm Paxos on the launch of a cryptocurrency offering. It’s not clear when exactly the service will launch or how many coins it will support.
“In any case, it raises a good question for other fintech firms not active in crypto: What are you waiting for? My colleague Ryan Todd dove into that question in a column last month.
“Today, I’m curious about exploring the flip side of that question. That is, what is keeping crypto companies—specifically those with large retail client bases—from diving into broader financial services by launching stock trading, high yield savings accounts, etcetera…”