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Since at least February, eBay has dropped several hints that some form of bitcoin integration was in the works. Earlier this month, eBay’s PayPal arm hosted a bitcoin-focused “town hall” meeting, although no specific initiatives were announced. Braintree has been part of the eBay company for less than a year, being acquired last September for $800 million, and its small size and relative independence might make it an ideal testbed for a larger PayPal integration.
One other reason for eBay to test a bitcoin payment integration with Braintree, rather than PayPal, is liquidity. Before it was purchased by eBay last year, Braintree reported that it was processing around $12 billion in payments annually. By comparison, PayPal processed $145 billion in 2012. Given the range of services currently supported by PayPal, any payment partner would need to have the capacity to process billions in payments. Given that the entire bitcoin market cap has been hovering around $7 billion for much of the last year, and that total venture capital investments in the bitcoin ecosystem are barely over $250 million, any eBay/PayPal payment partner would need to have substantial help keeping enough cash on hand to keep the books balanced.
Braintree’s small size and startup-focused niche might be able to offset this concern, at least to some extent. Should the deal come through, particularly in the next few months as holiday spending ramps up, the impact on bitcoin’s price and usage could be significant.
