PayPal has announced that it’s giving away over $1 million in Bitcoin — but there’s a catch.
“A crypto sweepstake” will see one lucky winner win $100,000 of BTC, while five others will receive $10,000 worth of the cryptocurrency each. Another 162 (a very exact number) are going to be rewarded with $500.
Prizes are going to be given out on a weekly basis between now and 21 December — but unfortunately, it’s only open to customers based in the United States.
Users will receive an entry into PayPal’s draw for every crypto transaction they successfully complete on the platform, with a maximum of 10 entries a week. The small print states that payments involving the PYUSD stablecoin are exempt. Alternatively, people based in the U.S. can enter for free by mail.
PayPal has been battling to turn around its fortunes in the face of an increasingly crowded market — and has been ahead of the curve when it comes to offering digital assets to its millions of users.
This appears to be the first time that the tech giant has launched a crypto giveaway — and it could encourage investors who are loyal to rivals such as Coinbase and Binance to make the switch.
PayPal’s total prize pool is worth about $1.386 million — with a total of 1,008 users set to win prizes. Winners are going to be contacted by email, but they’ll need to respond within five working days. Unfortunately, American laws means that lucky recipients will be on the hook for taxes — and will need to make a disclosure to the Internal Revenue Service.
PayPal vs Coinbase: Which is Better for Crypto?
The range of cryptocurrencies offered through the PayPal app is somewhat limited when compared with major exchanges, primarily because of regulatory concerns. It currently offers Bitcoin, Ether, Litecoin, Solana, Chainlink and its own stablecoin. While this covers a substantial amount of the crypto industry’s total market capitalization, it’s bad news for adventurous altcoin investors.
However, there is one crucial benefit that this platform has that many crypto-focused trading platforms lack: usability. PayPal is firmly a Web2 brand that’s well designed and straightforward. This also extends to digital assets, as it simplifies the process of opening a wallet and making a purchase.
Coinbase’s CEO Brian Armstrong has openly stated that one of his top priorities is to make stablecoins a more mainstream payment method. Given that PayPal already allows crypto to be used for purchases with millions of merchants, the company has an undisputed first-mover advantage here.
A key battleground for legacy brands and scrappy newcomers offering crypto concerns transaction fees. This can add up for PayPal users, especially for those who are engaged in frequent buys and sells.
And while Coinbase is available in more than 100 countries around the world, PayPal’s crypto services are far more limited by comparison. As things stand, its users can only snap up digital assets if they’re based in the UK, US and Germany — but other European countries are said to be in the pipeline.
Rounding off the comparisons between both of these brands, it’s worth looking at their share prices. PayPal stock has plummeted by about 29% so far this year, compared with a far more modest 2% drop for Coinbase.
Crypto Giveaways Rise in Popularity
Of course, it’s important to be wary of anyone promising to give away “free Bitcoin.” It often ends up to be a scam — and the threat of phishing, where scammers masquerade as trusted websites, remains prevalent.
But that isn’t to say that competitions don’t exist. One popular brand is Cardsmiths, which has a popular range called the Currency series.
Some of their trading cards carry a 1-in-96 chance of being able to redeem crypto — up to 1 BTC or 1 ETH in some cases. The prospect of paying $36.99 for two packs, and potentially receiving a prize of $86,600 in return, can be irresistible.
Competitions can be a powerful tool for adoption — and encouraging crypto-curious customers to open a wallet for the first time. It can also be a powerful educational opportunity, and incentivize newcomers to learn more about how digital assets and wallets work.
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