Investors can now purchase cryptocurrencies using Venmo
More than 70 million users of the payment app Venmo can now purchase Bitcoin, Litecoin and Ethereum, marking another step toward providing investors with mainstream access to cryptocurrencies.
Venmo's cryptocurrency feature went live for some users on Wednesday and will be available to more people in coming weeks, the PayPal-owned company said. The feature also includes a tutorial for buying cryptocurrencies and video explanations of the crypto craze.
Venmo added the explainers because the company wanted to create a platform that "demystifies some of the common questions and misconceptions that consumers may have," general manager Darrell Esch said in a statement.
Venmo users can purchase cryptocurrencies using money already in their accounts or through money inside linked bank accounts, the company said. Crypto purchases will be processed through Paxos Trust, a New York-based blockchain company, Venmo said.
Aside from Venmo's action this week, cryptocurrencies have drawn global attention in recent weeks for their high-flying performance. The crypto trading platform Coinbase, for example, debuted as a publicly traded company last week, with shares jumping 60% to $400 in its first day of trading. The stock ended the day at $328.28, giving the company a market value of nearly $86 billion.
Venmo said it is rolling out the service after finding that 30% of its 70 million customers have already started buying crypto or equities, with many them starting during the pandemic. Customers can buy cryptocurrencies with as little as $1, Venmo said. The option is available by clicking "Crypto" in the Venmo menu at the top right in the app, it added.
As more consumers are drawn to cryptocurrencies, major financial companies such as Visa and Morgan Stanley are responding by providing access to crypto investments and services.
Dogecoin surge
Meanwhile, the price of Dogecoin has surged more than 6,000% so far this year. Dogecoins — which bear the image of the "doge" from the internet meme — now have a market value of about $40 billion, according to CoinDesk. That puts it on par with personal care brand Kimberly-Clark, which makes Kleenex and Huggies.
Bitcoin, which traded at around $11,000 last October, jumped to almost $65,000 this month before falling back to about $55,000. Longtime investor Bill Miller told CNBC this week that he believes bitcoin is entering the mainstream marketplace because of growing consumer demand.
Despite the successes of Bitcoin, Coinbase and Dogecoin, some investors are skeptical of digital currencies because of their volatility, which is partly driven by speculators hoping to profit from a rise in prices, as well as their lack of tangible valuation data. Unlike a stock, cryptocurrencies have no underlying assets or quarterly profits that investors can use to determine a fair value. Some critics have also pointed out that the process of creating the currencies creates a hefty and expanding carbon footprint.