Payments giant Paypal saw its stock surge 17% to all time highs of $223.16 on Monday as the platform experiences a surge in interest and usage from US customers who want to buy bitcoin and other cryptocurrencies.

The stock’s record-breaking performance comes after PayPal recently reported a drop in its Q3 earnings report in October. While performance forced the payments giant to turn a blind eye for preliminary guidance on 2021 for now, there is a belief that the crypto trading service could turn the company’s fortunes around next year.

According to one report, Paypal stock bulls are expecting online “penetration of total retail spending to continue growing this holiday shopping season” due to government measures taken over corona virus.

According to analyst at Deutsche Bank Bryan Keane, crypto demand is the next money-ball.

He said: A recent PYPL survey revealed 54% of PYPL users have an interest in its crypto offerings and we believe there has been strong interest in demand thus far. Even more powerful is the frequency of visits to the PYPL commerce portal from crypto users, which will lead to higher customer engagement and more monetizable transactions.

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Meanwhile, starting in early 2021, PayPal customers will also be able to use cryptocurrencies to shop at the 28 million merchants on its network. This will probably result in increased demand for cryptocurrencies by PayPal’s clients and ultimately increased revenues for the company, at least for a while.

At the same time, Abra CEO Bill Barhydt tweeted that the demand for bitcoin now exceeded the daily supply of newly minted coins.

He wrote:

Paypal (alone) now fulfils more bitcoin demand than the amount of bitcoin created daily. (In) 2021 or 22 will highly likely see a retail bitcoin ETF. Demand will likely go up 100x at that point. 

This plays directly into PlanB’s S2F model bitcoin projection model, which in part posits that there simply is not enough supply to service demand after each halving.

While PayPal’s business move to accept bitcoin is a step in the right direction, the boost in demand might be short-lived if users and merchants are no longer convinced of the service. PayPal is known for its exorbitant fees and not long ago, a common saying among bitcoiners was that bitcoin would make PayPal obsolete.

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Additionally, PayPal users will not be able to withdraw or transfer their crypto funds to outside wallets, which essentially defeats the purpose of bitcoin and numerous cryptocurrencies which market themselves as decentralised networks.

While the argument can be made that mass adoption is still in its early days, it would be a shame if the industry allowed itself to slip into a ‘kick the can down the road’ mentality which it so vehemently opposed barely a year ago.

At the time of writing, the Paypal stock had pulled back to $219.47.

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