Unpacking PayPal's Stablecoin Demand From Crypto Users

Paypal's new stable coin is off to a slow start. That's according to data from Nansen. The data firm says that few people are using or holding py us D token in self custody wallets. They also said that smart money holders seem to be avoiding the stable coin so far saying that Paxis is custody in more than 90% of supply and exchanges like crap back end and crypto dot com hold just over 7% of supply. Uh Will I'm gonna pass this one down to you? Are you surprised there was like big excitement in the industry when this news was announced? But are you surprised to see that, you know, maybe not, a lot of people are holding on to these stable coins just yet? I'm not super surprised. I mean it just launched. So I think we just need to, you know, be patient a little bit here. We're also like in the depths of crypto winter. This isn't like a bear market anymore. This is just a total lack of interest, apathy all over. So for people not to be picking things up right now, that's not surprising. I hope paypal looks at these numbers, whoever the product manager for his, for this product looks at it as like, ok, the time will come for this at some point and they probably bake that into the strategy as well. Right. They have a lot of resources to be able to look at the market and look at the past launches of these coins. And sometimes they take forever to get adoption. I would suppose that they actually are working with larger companies and doing like a B to B model as opposed to a retail model first. And that'll also help them out on the regulatory side, right, where they're not just like issuing this token out to anyone who has Venmo who has paypal and desktop, they're probably going to go work with institutions and larger companies work uh first to see if this actually works for them. So that's not super surprising to me. Uh Just how the market is right now, Wendy. I'm not surprised at all by this. Um We guys, we're in a bear market. So this makes sense that there's not gonna be a whole lot of usage with crypto, especially when we're talking about like web two brands. Um paypal is a massive web two brand that facilitates money to people all over the world. I used to use it for ebay all the time. So I don't understand why people would just jump on the staple coin bandwagon from paypal when it's just a lot easier to use cash and to use electronic currency in that fashion. So, to me it's no big deal. And, um, yeah. Yeah, P US D I think is very much a retail play. Right. And we've seen over crypto history that retail excitement happens and then retail excitement goes away. Right. The D five D gens aren't gonna be aping into P US D to do cool things on chain. Right. So, I think what we'll see is a slow, steady uptick, possibly until sort of that next euphoria kicks in. And then I'd be interested to see what happens then, right, when Sable coins become a bigger part of the picture uh at the retail level, at the paypal customer level, as opposed to those who are uh familiar and conversant already with things like tether or things like us DC. So yeah, holding judgment on this one because I don't think it's necessarily going to be super duper uh on chain Bonanza with P US D for the foreseeable future, just given those broader market conditions. But it could be a really interesting sort of retail indicator or I guess retail index for stable coin usage going forward into that next wave of excitement and that I think will be the the revealing data uh is still to come my adventure about what P US D means for the market as it relates to onboarding folks from again, these highly custodial options into more crazy on chain stuff that I think could be a really interesting set of data that we'll certainly look at in the future. But Jen sell your hand. Yeah. No, I agree with all of you. I think it is just a low time, uh, in the crypto market. There's a report on coin just this morning saying that Ethereum has hit its eight month low when it comes to daily transaction fees. So I think this isn't just a stable coin conversation. I think paypal is going after a very different audience and some of the other stable coins that are out there are going after and it's slow and steady wins the race here. Um I don't think that they were expecting to see massive, massive mainstream adoption right away just given what's happening, given what's happening, not only in the markets but on the regulation side of things too. And so I can imagine that they're treating this as like a pilot or testing phase. Um And I can, I expect and again, this is backed on no insider information. I haven't spoken to anyone from paypal, but I probably expect them to come out with some kind of educational strategy to get that mainstream audience once there is more interest, once we hit the next full cycle and there's some collaborations and partnerships in the work. So yes, I am also not surprised by this report and I hope that it doesn't uh shake paypal because it's probably a longer strategy here.