Shares of PayPal Holdings Inc. PYPL,
are up 1.2% in premarket trading on Thursday after BTIG analyst Mark Palmer upgraded the stock to buy from neutral, citing traction for the company’s cryptocurrency platform. PayPal announced in October that it would allow users to buy, hold and sell cryptocurrencies such as bitcoin BTCUSD,
through the PayPal platform, and Palmer said Paxos, a private company that supports PayPal’s crypto efforts, “has seen its trading volumes soar impressively in recent weeks.” He expects “the vast majority” of the volume on Paxos’ itBit crypto exchange to reflect transactions for PayPal customers, leading to his projection that crypto could add more than $ 1 billion to PayPal’s annual revenue by 2022. ” Much more importantly, rising crypto volumes bodes well for PYPL’s active account growth and engagement, he wrote. PayPal will also allow customers to make online purchases using their cryptocurrency holdings, which Palmer said was a cheaper funding mechanism for PayPal compared to when people use the service to fund online purchases with their credit cards. ”As a result, the cheaper funding that comes with using crypto in financing trade transactions could boost adoption rate and margins, ”he wrote, setting a $ 300 price target for the stock. PayPal shares are up 110% over the past 12 months as the S&P 500 SPX,
has won 16%.