Qrafty hears that PayPal's making a big crypto move, UK gets funny with your money and a unicorn accountant!

BTC still at ~ $29,000 , ETH stuck @ $1840 while Doge is at ~ 7 cents per coin

Author

Qrafty the Crypto Badger
August 07, 2023

PeeKaBoo! Aloha and welcome to Coinqraft, your VIP pass to the crypto realm and its wonderful treasures, minus the bro-nado, Discord neckbeards and Twitter drama! 🚀🔥 

You are here to become the smartest crypto connoisseur in town, so 🦡 Qrafty just got back from the cryptographic woods with knowledge, news and nasties! If you're all about the smarts and none of the noise, you just found your crypto sanctuary! 🖖 

A new week is upon us and your time is important, dear reader, so Qrafty presents the main story of the day 👇️

Yowzaaa! Paypal is launching their own crypto stablecoin named PYUSD. The famous US fintech that gave the world the “Paypal Mafia” . Which is like the least threatening and nerdiest mafia in the whole world, you should be more frightened by the socks mafia. Yes, that’s a thing and you’ll remember that when your feet are cold next time 🥶 . They have a monopoly on warmsies and fluffy feet! But also… remember that nerds kinda rule the world nowadays 😉 

This comes after a delay because Binance’s coin, named BUSD, was declared a security by the SEC. BUSD was issued for Binance by a company named Paxos. So PayPal waited out, made sure they were compliant and issued PYUSD today, fully backed by real $USD.

So what Paxos is doing is like a StaaS, a Stablecoin As A Service business. You come to us and we deal with the technical stuff, just make sure you are compliant. Aaaaaand tadaaaa, you get your own shiny digital coin!

PayPal is as a web 2.0 company and their reputation, customer wise, is a bit such and such, with some nasty situations reported by customers of suddenly finding that your account is blocked, withholding funds or providing a really nasty overall experience.

Also, PayPal is the company that closed WikiLeaks’s account. So yeah… that was nasty.

That’s not good Qrafty…

While some complaints are obviously exaggerated, some are real. But let’s remember that Paypal is a 25 year old centralized company with 431 million active accounts globally. Even if that number is a lie and a vanity metric (might be tweaked a bit, but highly unlikely it’s a blatant lie); but even if it’s a quarter (which is about ~ 108 million) is an absolutely massive business.

They are the underlying payments infrastructure for a LOT of the ecommerce and digital service payments in the US and receiving payments/selling for merchants in countries outside US. Being in a digital space and having a PayPal is like the basic requirement to start selling something, especially in the US. For a LONG time they were the onboarding ramp for online payments, just like coinbase is for crypto in the US.

So they know what they’re doing tech wise. It’s in their DNA, they bridged the digital with the physical before, by allowing for a safer and faster experience (safer being the key word here) while paying for auctions on eBay. Which in turn allowed eBay to grow… which allowed PayPal to learn and grow… which in turn…. aaaah, Qrafty knows you’re smart and you get the picture!

So it’s not really easy to steer that kind of juggernaut and some nasty stuff is bound to happen, regardless of what you do and how well you do it. It’s easy to judge, it’s harder to try to understand. Qrafty takes no sides!

Qrafty, I’m getting mixed feelings here…

Good, that’s the point, think for yourself! Qrafty tries to present multiple perspectives so that you get a bigger picture, not just a narrow view through an intended keyhole. 🗝️ You draw the conclusion, Qrafty is here to help!

So even though PayPal has its history of booboo’s, the same history also tells us it’s a huge company with a lot of financial street rep and stability. That cute name isn’t your buddy, it’s a giant payments behemoth. That matters in TradFi (traditional finance) a lot! Why? Because the entire foundation of our society is based on trust (and fear)… but that’s a story for another day. And money! Money money money! And PayPal is very well connected with TradFi, which means it will have access to a lot of capital, should they require it. 🤐 

What does TradFi has to do with crypto?

Well, please understand that all crypto companies need normal banks to handle the capital inflows and outflows. Especially now, since the two biggest banks that supported the crypto ecosystem collapsed: Silicon Valley bank and Silvergate Bank. Weird timing, right?

Ok Qrafty, so PayPal is a big player with lots of cash, backing and know how with a DNA of bridging tradition and online, right?

Right, you smart beautiful soul! Now, they’re issuing their own stable coin to offer it to their customers. Because Qrafty thinks they are executing on the well crafted plan to make a reliable bridge between TradFi and the crypto world, the one stop shop for your magical internet funny money needs. They are taking small and regulatory compliant steps towards this step.

What does this mean, Qrafty?

It means that it’s important to look at the whole picture. PayPal is on the move and they’re aiming to be the gate for crypto mass adoption.

There are a lot of online merchants doing business with PayPal, which is plugged into the ecommerce ecosystem quite well. This means that PayPal has access to a unique mix of potential customers with A LOT of capital, from their user base. These customers can also accept crypto payments for the businesses via the PayPal ecosystem.

A lot of people with a lot of capital want a reliable way to get exposure to crypto without having to deal with crypto directly. And a lot of merchants want a one click install solution to get crypto payments. 

That’s where PayPal is positioning itself. Because it is a mélange between TradFi and something more modern than… old white guys smelling of embalming liquid combined with expensive perfume, dressed in suits, who want to turn you into their financial slave; or 20 somethings who believe they’re the gods of investment because they bought a monkey NFT. Makes sense?

This is exactly what PayPal is: the middle way, a traditional payments company at its core principles, developed to enhance and simplify the payments experience between physical businesses with an online presence and their customers. That’s what they have been doing for a long time and they’re good at it. Please bear in mind that when Paypal started, paying online was hard, filled with dangers and not a lot of options; checks were being used to pay for eBay auctions and this created a ripe environment for scammers and thieves (rings any bell with crypto today?

So why didn’t they issue the stablecoin themselves?

The reason why they didn’t issue it is because it would be a security of PayPal. Binance took a hit and had their Paxos issue stablecoin declared a security. But because it is issued by a third party and it’s a stablecoin, this removes the most important friction from the Howie test: appreciating in value asset (it will always be 1$) and ownership (externalized to Paxos).

Also, choosing to externalize this service removes A LOT of technical headaches for PayPal, paving the way for them to think on the business aspect and how to execute and capture more of the market.

So now they have their own stablecoin and can’t be accused of trying to pump or dump it, right? Right!

What’s the point of a stablecoin, Qrafty? Doesn’t really make any sense to do it…

It makes a LOT of sense and it’s a fine move for a company like PayPal. It’s one of those moves that only certain companies can make at certain times in their history. PayPal can roll out a lot of services connected to a stablecoin. Hell, they can even build a free DEX and build paid services on top of it, to follow the open source movement.

PayPal is planning to become a combination of a bank + hedge fund + (passive) fund asset management company for their crypto oriented customers.

So they store your crypto, they invest your crypto and they manage your crypto. All these services are built on top of the stablecoin. Get it now?

For a keen badger eye, it can be seen that they are taking the regulatory safe approach. They’re making small steps, learning along the way, improving and then going forward again. Slowly rolling out their plans without making too much of a fuss. Not “breaking” anything, but rather expanding their movements after the regulatory field has been cleared by the institutions.

The people at PayPal sensed something big and are taking the right steps to move towards capturing A LOT of the demand for crypto from people not really hardcore with tech/crypto culture, but who know how to make money and want access to opportunity without the hassle (which is most of the market).

To Qrafty, it’s not a coincidence that they were so hard on anything crypto related and then, suddenly, in 2020 started offering Bitcoin, Ethereum, Bitcoin Cash and Litecoin to customers to buy directly from their PayPal accounts.

Why no XRP, Qrafty?

Let’s not go there, mkay? 😃 After that, they noticed that business is good and that there’s real interest for crypto (even after the bull run), slowly rolling out more features while staying compliant.

Qrafty sees that more as PayPal becoming an entry ramp for those customers of theirs that want exposure to crypto without the headaches of storing coins, DYOR, wallets, etc. It’s all in there and easy, in the PayPal account you know and are used to!

Why is this important, Qrafty?

Because crypto has a big UX problem. See? You don’t know what UX is, unless you are in tech design. UX means user experience. Most people stay away from crypto because it’s really hard to get in on the action. Between DEX’s, CEX’s, pools, rugs, fish coins, perps, whales, NFT’s, blockchain, yield, farming, degens, astrology witches, options and shorting with size, there’s a whole culture and multiple universes that intersects in funny, weird and extremely serious ways.

Most people (just like you, dear reader of Qrafty’s crypto ramblings) want to place their money into something that is safe, get on with their busy lives and check on it from time to time, while sipping their latte. While there is no such thing as safe in life and especially in crypto, PayPal is a good option.

Between work, family, friends, hobbies, obligations and time for oneself, there’s not a lot room left to spend nights with degenerates in the dark corners of the cryptoverse to find alpha and gems. That’s why Qrafty’s here 🙂

And now PayPal is saying: we got you covered, come to us and sleep tight, your money is working for ya!

While the functionality is rather limited for now, they have made a smart decision: integrating with Ethereum. That’s the best option in time, costs and business wise. It’s the oldest ecosystem that has the most developers, the most apps, the clearest documentation and it’s the most battle tested. And it’s enough to start with. Like and MVP.

So what’s the final idea, Qrafty?

PayPal is positioning itself as THE onboarding ramp to get exposure to crypto for their customer base, like a crypto bank + hedge fund + passive investment asset company for their already existing customers. An all in one digital shop for your crypto needs.

They chose the ETH ecosystem which is the best solution to start with. Learn and adapt on the way. In 2021, they launched a feature that allows US customers to use their crypto to buy online from millions of merchants globally.

That’s huge because they control both regular user wallets and merchants wallets, plus merchant software to accept payment in crypto.

Oh, and PayPal also holds over $630 million of customers crypto. See how Qrafty was saying that it’s becoming a bank? 😁 

For Qrafty, this business opportunity for PayPal is like finding a diamond-studded, gold-plated, money-printing machine at the end of a rainbow guarded by unicorn accountant!

PayPal opening a crypto division and an entire crypto dimension for their customers is a move that can expand the company in multiple way and offer incredible growth during the next bull run. Which is like at most 18 month away. Huh… kinda makes a lot of sense now, doesn’t it? 🤑 

For the crypto space? That’s a centralized company becoming the biggest bank in crypto and bringing the whole of TradFi supporting it into the space. You decide for yourself. 🖖 

Oh and here’s the CEO of Circle, the issuer of USDC, another huge stablecoin on the market, mentioning compliance and collaboration with TradFi banks, just to make sure you have all the info.

At the end of the day, the market is open. If the crypto space cannot create enough value and simplicity for new people to come in and join, others will, even more traditional companies. In capital markets, experience, strategy and vision are needed. Some lean back and observe while others, more hot blooded, run in the front, expend energy and resources and clear hurdles for the observers.

🙃 Qrafty hopes that you enjoyed the main story of the day, so here’s something to elevate your spirit! Why? Well… that’s easy… because you deserve to be joyful! 😇 👇️ 

This is most people’s “investment strategy” in crypto. Don’t be that! 🤣🤣🤣

A good giggle… priceless. For everything else there’s… laughing hysterically.

Here are the main stories of the day

The SEC has denied applications for similar ETF’s for years, while Ms. Cathie Wood lets us know that the SEC will approve multiple ETF’s at once. And this time, the third time’s the charm for her ETF as well. Qrafty doesn’t know if this is accurate or if it’s one of those games where we say what we hope to happen as having been already happened. Is it a lie if it’s wishful thinking?

Now, if Ark were to be approved, that would certainly pave the way for a cascade of approvals, especially since BlackRock’s ETF will be approved in September… or not. It would also be a very positive signal for the crypto market, since alts are screaming in pain right now and some can’t hold on to technical levels much longer. We will see what happens on the 13th of August. Qrafty is reserved and thinks it’s not going to happen.

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A UK banks seems like it is imposing limits on what you can do with your money if you plan on sending it on crypto exchanges. They’re basically telling you: it’s your money, but it’s our infrastructure, that’s the catch. So if you want to get it in our out on our infrastructure (aka your bank account), you use our rules.

Regular banks are still the onboarding and offboarding ramps in crypto. They have always been. The two biggest banks that were supporting the crypto ecosystem are gone: Silicon Valley Bank and Silvergate Bank. Crypto companies, exchanges and projects went straight to the grave in the past couple of years.

There’s a liquidity crisis and now with more limitations imposed on liquidity for crypto companies and customers. Big players are pushing for ETF’s. There’s a bull run expected in not so long from today, for medium and long term investor timeframe.

Are all these coincidences or have the big guys decided that crypto is really profitable?

These stats should point out the direction of the markets in the near future, determined by what the FED might do with the rate hikes, yikes! Qrafty felt the need to say yikes because there are only so many times when you can rhyme tyikes with something in a normal conversation… 🤔 

A total of over $100 million in Bitcoin has left exchanges past week, with two anemic spikes for XRP and Litecoin with inflows of capital. Also Solana got inflows of around $9.5 million.

XRP had a jump because they won the lawsuit with the SEC, which was expected by the community to be a series of huge green dildos that would wash away the pain they have endured since the trial started. Well… a few green candles happened, but not as expected.

Litecoin had its halving, so back to the closet for that one.

On the 1st of January, 2024, “US businesses will have to collect the name, address, and government ID of anyone who uses more than $10,000 crypto to buy stuff.”

A think tank called Coin Center sued the government for this under the argument that basically it’s financial surveillance from the government. A judge threw out the lawsuit. Now Coin Center is going again.

To Qrafty, this looks like KYC and AML extending from banks to regular businesses.

They claim that everything is working as usual and things are according to plan. Oh and to focus on building. Well… top of the luck to them then!

Hey hey 🙃 Qrafty hopes you are enjoying the experience here and would like to regularly get Qrafty’s letters, can click on the button below. Qrafty is really really grateful to have you here, so thank you!

Feel that? What….? Your crypto IQ rising?

What’s a Bitcoin ETF?

A Bitcoin ETF (exchange traded fund) is like a digital treasure chest that lets you ride the cryptocurrency rollercoaster without needing a virtual reality helmet. It's Wall Street's version of 'pretend and play' – where you can speculate on Bitcoin's wild adventures while sipping your latte.

You don’t have to own the coin to profit (or lose) from its movements. You don’t have to get your hands dirty in crypto just get a piece of the action. You don’t have to spend time with degens in obscure Telegram channels talking about furries, waifus and how to go full degen on a particular token.

Qrafty, what kind of places to you hang out on the Internets?

Aaaaaaanyway, it's as if someone bottled the excitement of a bull run and put it on the stock market shelf. It’s accepted by the traditional suits, so you can play with the big boys and have no fear that crypto things are going to happen. You just go play with the boys in suits as if you were buying a regular stock. So, if you've ever wished to surf the Bitcoin waves in your pajamas, this ETF is your golden ticket to the crypto amusement park! 🎢🚀.

Market Whispers

Sooo…. short everything? Jokes aside, there are some movements in the market a bit more unusual than the usual fights and turf wars going on.

Bitcoin has been struggling to push past the August open, which would breathe some life into it and bring some volatility into a market drier than a lemonade stand in Antarctica!

It's like a desert where even the mirages are just financial advisors trying to sell you sand futures. 💸🏜️ Alts are slowly bleeding through the pain of lack of liquidity and that’s pretty much all folks!

That’s it for today! Qrafty wishes you to live each moment as if you are listening to the music you love most! Wahaha!