Cryptocurrencies are here to stay, and many traditional organizations are reorganizing their businesses to fit into this reality. Case in point is PayPal, the world-renowned payment gateway. Sometime back, PayPal announced that it was patenting a technology that would make crypto transactions faster, and less costly. This led many to speculate that PayPal was about to accept Bitcoin. But is that really the case? Bitcoin while being the biggest crypto, it has its fair share of problems, which makes it quite inconvenient for a high volume transaction platform like PayPal. The next logical crypto that fits in with PayPal would be Litecoin (LTC), and for good reason.
Firstly, Litecoin (LTC) happens to have some of the lowest transaction costs in crypto. It is also quite similar to bitcoin on the aspect of security, which makes it the perfect fit. The ability to send crypto cost-effectively and fast, fits quite well with PayPal’s business model. That’s why the likelihood of PayPal adding Litecoin as opposed to Bitcoin is quite high.
Secondly, PayPal is facing competitive pressure from crypto companies such as Coinbase, and as such, it will add a crypto that gives it competitive advantage. Last month, Coinbase announced that it would be launching Coinbase commerce, a platform that works the same way as PayPal. To beat this competition, PayPal would have to go for a crypto that is secure, offers fast transaction speeds, and low transaction costs.
Bitcoin definitely doesn’t meet all three of these requirements, which is why Litecoin makes for a better alternative. Litecoin not only scores well on these three areas of competitive advantage, it is also a well-known crypto that has very high trading volumes. These are attributes that would go well with PayPal as it plays catch up in the cryptocurrency space.
There is also the possibility that PayPal might choose to add a basket of the most popular cryptos, instead of just adding one. Even if they were to do this, Litecoin (LTC) is still one of the coins that would be included. That’s because it is not only a high volume crypto that is in the top 5, it is also listed on Coinbase, the largest exchange in the U.S. As such, PayPal would most likely go for it, among several others, because it has already been tested by merchants and proven to be effective. There is definitely no chance for PayPal to add Bitcoin and Ethereum and leave out a coin like Litecoin.
At this point, it is really a wait and see game, as we can only speculate. However, given that the chances of such a deal are quite high, it would be wise to start investing in LTC now, before the deal happens and LTC price shoots through the roof. Besides, there is a possibility that the Litecoin’s Litepay debit card will be launched within the year, after it was put off earlier. Therefore, the upside potential for Litecoin (LTC) is still enormous.
This information should not be interpreted as an endorsement of cryptocurrencies or a recommendation to invest. Historic performance is no guarantee of future returns. As an investment class, cryptocurrencies are speculative investments and investing in cryptocurrencies involves significant risks – they are highly volatile, vulnerable to hacking and capital loss and sensitive to secondary activity. Before investing you should obtain advice and decide whether the potential return outweighs the risks.