PayPal scraps annual purchase limit of cryptocurrency

PayPal has announced its annual purchase limit of $50,000 (£36,500) for Bitcoin and other digital assets is being removed.

Similarly, the platform’s weekly purchase limit is being raised fivefold from $20,000 (£14,500) to $100,000 (£73,000).

Jose Fernandez da Ponte, PayPal’s vice president of blockchain, crypto and digital currencies said: “These changes will enable our customers to have more choice and flexibility in purchasing cryptocurrency on our platform.”

Whilst choice and flexibility may be the rationale behind this change, PayPal’s move into the cryptocurrency market back in October 2020 has had less of an impact than speculation suggested.

The decision was seen as a major step towards bringing digital assets into the mainstream, partially fuelling Bitcoin’s price hike earlier this year.

Around this same time, the company also announced ‘Checkout with Crypto’, allowing customers to not only buy digital assets but spend them at all of PayPal’s 29 million merchants.

Speaking on this new feature at the time, Dan Schulman, president and CEO at PayPal, said: “As the use of digital payments and digital currencies accelerates, the introduction of Checkout with Crypto continues our focus on driving mainstream adoption of cryptocurrencies while continuing to offer PayPal customers choice and flexibility in the ways they can pay using the PayPal wallet.”

Despite this drive towards mainstream adoption, the cryptocurrency market has fallen into a bearish trend in recent months.

Bitcoin has lost around half of its value since its all-time high above $63,000 (£45,000) in early April.

Meanwhile, PayPal shares are down 2.56% since the removal of purchase limits was announced, suggesting more is needed to reverse this recent downward trend for cryptocurrencies.

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