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If no one can transfer bitcoin out of the PayPal system then the only way for you to sell it for $47,000 is to find someone else on PayPal willing to buy it for
by quietbritishjim 6y ago
If no one can transfer bitcoin out of the PayPal system then the only way for you to sell it for $47,000 is to find someone else on PayPal willing to buy it for that amount (or actually a bit more because of the spread). So PayPal don't lose anything.
Admittedly this doesn't sound right to me, but it's what the parent commenters seem to be saying.
- liquidify 6y agoIt doesn't work like this. If paypal's customers decide to cash out as a whole, then that means there is a net sell. There won't be enough buyers in paypal to cover the sells. They would need to expose themselves to another market by buying / selling actual bitcoin to be able to float like you describe.
- mamborambo 6y agoIn most financial systems, there has to be a "banker" to make the market, i.e. they have to close the deals when the aggregate buy/sell deals end in surplus or deficits. So Paypal has to close the ending position -- at least that is my understanding.