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Buying bitcoin with PayPal isn't equivalent with buying from Coinbase or other exchanges/brokers. You can't send your bitcoin outside of PayPal. You cannot withdraw to your own wallet/cold storage.

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Not equivalent, sure. PayPal's crypto appears to be aimed at the less-technical users who want crypto exposure. There's surely a market for that. Perhaps they can play the Windows to Coinbase's Linux.

> You cannot withdraw to your own wallet/cold storage.

The prevailing mass interest in Bitcoin is for speculation, which doesn't require an offline wallet. Letting PayPal hold it is fine for most users.

It sounds like PayPal isn't actually buying Bitcoin, but instead created their own proxy bookkeeping instrument. Speculation, but that's what it sounds like to me if you can't have Bitcoin's utility and only its store/speculation.

That sounds extremely risky for PayPal. They're effectively shorting bitcoin by doing that. If the price rises dramatically they have to just come up with that money out of their own coffers. If they buy bitcoin they can merely liquidate it and pay you the proceeds when you sell your paypalcoins.

They could hedge with futures contracts in a more liquid, reliable manner.

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