Bitcoin Updates: PayPal’s Bitcoin Promotion Fuels Optimism for Adoption and Raises Tax Questions

PayPal has

for people living in the U.S., featuring weekly draws with a total of 1,008 winners and a top prize of $100,000 in . Running from November 17 to December 21, the contest asks entrants to either buy eligible cryptocurrencies (excluding its PYUSD stablecoin) or send in entries by mail . Winners are picked at random across three levels: six will get $100,000, 30 will receive $10,000, and 972 will win $500 in Bitcoin . This campaign highlights PayPal’s growing interest in crypto, following its 2020 rollout of digital asset support and the 2023 launch of PYUSD, a stablecoin pegged 1:1 to the U.S. dollar .

The sweepstakes have generated a range of responses. Some in the crypto community see it as a positive step for Bitcoin’s mainstream use, while others worry about possible scams, with some social media users speculating that PayPal’s X account could have been hacked

. Cryptopolitan, a digital currency news source, verified the authenticity of the sweepstakes but mentioned that no winners had been announced after 10 days. Detractors also pointed out the tax responsibilities for U.S. winners, who must report their earnings to the IRS .

PayPal’s entry into crypto promotions fits with its broader strategy to compete in the busy digital asset sector. The company’s PYUSD stablecoin, issued by Paxos Trust Company, now boasts a $3.77 billion market capitalization

. Recent updates in PayPal’s ecosystem include Paxos’ purchase of Fordefi, a crypto custody firm, for more than $100 million . This deal strengthens Paxos’ custody offerings by merging Fordefi’s multi-party computation wallet technology with Paxos’ existing solutions.

The sweepstakes also demonstrate PayPal’s efforts to draw users away from competitors like Coinbase and Binance by providing rewards. However, the campaign does not include altcoins beyond Bitcoin,

, and a select few, for risk-taking investors. At the same time, PayPal’s wider fintech collaborations, such as its partnership with Newegg to bring AI-driven shopping features, .

Even with the excitement around the promotion, PayPal’s push into crypto still faces obstacles. The company’s limited crypto offerings and regulatory issues in the U.S.

. Nevertheless, the sweepstakes highlight PayPal’s aim to serve as a link between traditional banking and the crypto world, using its large customer base to encourage broader adoption.