A Strategist from Bloomberg Says PayPal’s Stablecoin Announcement Not Priced In, Predicts Huge Ramifications for Ethereum
A strategist from Bloomberg, Jamie Coutts, believes that PayPal’s recent launch of its own stablecoin, PYUSD, has not been factored into the markets yet. Coutts argues that this development could have a significantly positive effect on Ethereum (ETH), as many market participants are overlooking the fact that PayPal’s network is much larger than Ethereum’s.
Coutts highlights that even a small number of PayPal users converting to PYUSD, which is an ERC-20 token, could have a massive impact on Ethereum. He explains that if just 1% of PayPal’s 435 million active accounts convert their dollar balance to PYUSD (equivalent to 4.35 million users), it would lead to significant ramifications for the Ethereum ecosystem and the value of ETH.
Coutts also suggests that Ethereum may be undervalued, considering its substantial growth in fee revenue compared to its relatively modest price increase. He notes that a similar divergence in the past preceded the bull run of 2020. He emphasizes that Ethereum’s fee revenue for 2023 has surged by 176% compared to the price, which has only increased by 53%. This performance indicates that Ethereum’s moat is deepening and widening.
As of now, Ethereum is worth $1,839.
Hot Take
PayPal’s entry into the stablecoin market could have significant implications for Ethereum. If even a fraction of PayPal’s massive user base converts to PYUSD, it would greatly boost the Ethereum ecosystem and the value of ETH. Additionally, the growth in Ethereum’s fee revenue suggests that its current price may not accurately reflect its true value. Overall, this development is a positive sign for the future of Ethereum.
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