The Media Missed the Real High-Profit Story in the PayPal Spin-Off By Michael A. Robinson

The headlines were filled with the news last week about eBay Inc.'s (Nasdaq: EBAY) plan to spin off its PayPal unit as a publicly traded company in 2015.

Coverage points to a similar obvious fact: That the spin-off comes months after a highly publicized suggestion by Carl Icahn that was brushed off.

To be clear, I'm a big believer in this spin-off, for a number of reasons.

But, the truth is the really big story here - and all the profits that will come with it - was missed. Until now...

The spin-off will provide eBay investors with shares in fast-growing PayPal as a tax-free special dividend.

After all, PayPal is one of the world's leading payment companies. It has a remarkable 152.5 million users, and Wall Street believes PayPal could have a market capitalization of as much as $31.5 billion.

PayPal clearly isn't taking any chances. It hired former American Express Co. (NYSE: AXP) executive Dan Schulman as its new CEO.

But there's an angle to the story that almost no one has taken the time to mention - this spin-off is great news for Bitcoin.

The move comes just days after PayPal announced a whole new level of support for the virtual currency. Taken together, PayPal's moves are a sign that the digital payments world is getting hotter by the minute, and that Bitcoin ranks as the leading virtual currency in this rapidly growing ecosystem.

Last year in my webinar Edison's Revenge on the Dollar, I noted that Bitcoin was an unstoppable global force that would transform the way people pay for goods and services, particularly over the Internet.

I believe a series of events unfolding daily proves this is true. It also means that Bitcoin has moved well beyond the realm of a pure currency play into an advanced, secure digital payments platform.

Let's start with PayPal's Bitcoin move. Last week PayPalannounced it had struck a deal with three leading Bitcoin processors, Coinbase, GoCoin, and BitPay. Under the agreement, eBay merchants who work with PayPal can now accept Bitcoin.

Over the last several months, PayPal senior leaders have expressed keen interest in Bitcoin's Web-centric technology. Scott Ellison, the company's senior director of corporate strategy, told CNN Money that integrating Bitcoin was part of PayPal's status as "the original payments disruptor."

For a new company like BitPay this is a pivotal moment, but not the first big break it's gotten. Just six months ago, it received $30 million in venture funding from a group that includes Yahoo! Inc. (Nasdaq: YHOO) founder Jerry Yang and Richard Branson, chairman of the Virgin Group Ltd.

I met with BitPay CEO Tony Gallippi in late 2013, and I can tell you he's always looking for new ways to further integrate Bitcoin as an online payment system.

You may remember earlier this year I updated you on the company buying the rights to the St. Petersburg Bowl college football game. Gallippi was a key part of that deal. He orchestrated the game's name change to the Bitcoin Bowl, which will be played this December 26 at Tropicana Field.

Now, Gallippi's company and other processors will allow PayPal users to pay for things like online games, music, and other digital goods using Bitcoin as a form of payment.

These transactions will only be viable through the PayPal Payments Hub. And merchant support will only be available for those in North America. Nevertheless, this is a huge step for Bitcoin, considering that hardly anyone had heard of the virtual currency just two years ago.

And Paypal isn't the only large company cozying up to the thought of Bitcoin. Apple Inc. (Nasdaq: AAPL) recently began allowing Bitcoin apps to be sold on its highly popular App Store.

Here's the thing. This links Bitcoin to another key aspect of the digital payments industry. Apple is soon to launch its Apple Pay mobile wallet that allows consumers to use their iPhones to pay for goods and services.

What really caught my eye is that Apple has some very sophisticated security features embedded in the platform that harken to Bitcoin's approach to keeping payments confidential.

Now then, I would like to see a higher price for Bitcoin than what we have at present. It was trading last night at around $390.

However, with Bitcoin now gaining critical mass and getting the backing of PayPal and Apple, I believe the price is set to rise again in the weeks ahead.

Tech is minting more millionaires than every other sector right now. Michael's following all the high-profit trends in this field, reporting twice each week with new investment ideas and research. To get Michael's Strategic Tech Investor - free - click here. You'll also get his latest free report, Double Your Money on the "Graphene Wave"