Howard Lindzon, founder of StockTwits where I recently launched a Premium Chat Room, writes a daily blog about investing. In particular I like his recent post about Facebook and the future of Cypto. Here it is, short but sweet:
One the biggest technology stories of the week maybe the year is Facebook’s announcements around their token/payment/coin – Libra. Here is The Block’s coverage of it.
Long time Bitcoin bull and investor in all things crypto Barry Silbert had this to say:
The launch of Facebook’s cryptocurrency will go down in history as THE catalyst that propelled digital assets (including bitcoin) to mass global consumer adoption. Will be remembered as just as important — and transformative — as the launch of the Netscape browser
I liked my friend Chris Perruna’s more cynical take:
The Facebook crypto sounds to me like a centralized coin backed by corporations (looking to clean up on trillions in transaction fees), defeating the purpose of decentralized crypto.
I personally think it’s just more bad news for banks as their fees move to others. In a single year, the three largest banks earn/take the following in fees:
$1.1 billion in ATM fees.
$2.3 billion in maintenance fees.
$5.4 billion in overdraft fees.
Big tech and crypto are coming for those fees.
It feels like the Facebook crypto initiative has a great shot at getting traction. Hundreds of millions of people will get a taste of moving money in and out digital currencies as they pay for goods and services. I think it’s bullish for Bitcoin, Facebook, Visa and Mastercard and Paypal (I am long all but Visa).
These initiatives won’t stop in the coming years which is another reason bank stocks will likely continue to underperform.
Samantha here. I am not a big Bitcoin/Crypto bull, but I do trade Facebook and Banks. I am on board with the ‘lower bank” theme for sure – for all kinds of macro and technical reasons, but Howard’s thesis that Crypto will siphon off profits just adds more reason not to like Banks (competition for banking fees). I actually think Crypto could pull down Facebook when the mercurial market of Bitcoin changes wind. Sentiment has not helped OSTK and some others that added crypto to their brand and their business offering. I also don’t trust FB will have an easy time getting above $194 in the short-term, but a sustained move above $198 is all Bulls need to give it any excuse to buy – crypto included.