I think it will have detrimental effect on btc price when and if Paypal starts accepting bitcoins. Paypal, like Western Union, faces an agonizing future where BTC becomes the mainstream payment option. Paypal's only options at this time are:
1. Delay and postpone the inevitable mass adoption of bitcoins
2. Co-opt and integrate bitcoins and become another bitcoin processor
They are doing whatever they can do to prolong Option #1 right now. Option #2 is painful to them because it means the loss of their hugely profitable business model.
I think there is much truth to this. Even though Bitcoin has the long term capability to largely render a massive amount of PayPal's business obsolete, they are a trusted household name and by integrating Bitcoin ahead of the crowd stand a very good chance of gaining a large market share. Adapt or die, and they are opting for adapt. In a speculative 'down the road' hypothetical situation, where mass adoption of Bitcoin has become a reality, I suspect it will look much the same as the history of credit cards.
With credit cards, each store had their own at first, mostly large department stores. This is the equivalent of the individual businesses accepting Bitcoin. Then came the "Diner's Club" cards, which could be viewed as the equivalent of PayPal becoming involved, wider range of use, but still somewhat limited. The next step then would be sometime later major financial institutions getting on the Bitcoin wagon, essentially paralleling the birth of Bank Americard...or what we now know today as Visa. And the rest, as they say, is history.
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