11. November 2020 | 13:55 CET
BIGG Digital Assets, VISA, American Express: Pay per Coin & Click!
The stock markets are on a rollercoaster ride - so are the cryptocurrencies. For the past 48 hours or so, the stock markets have experienced unparalleled volatility. While some stocks are taking off in the hope of a quick end to the pandemic, others are losing ground, while in recent months have been able to benefit from the pandemic restrictions. The crypto world is even more volatile, but the individual coins are developing very differently. Up-to-date there are according to CoinMarketCap.com 7,637 Coins, which are traded on 32,540 markets and represent an added value of USD 441.2 billion. The old father of the movement, the "Bitcoin" stands alone for USD 282.7 billion or 64% of the total market. It has grown by 60% in 2020. Service providers and payment processors are active in this market, but with different objectives. PayPal announced its entry a few weeks ago, and now the hunt for successors begins. We take a look at the protagonists of this not so new market segment.
time to read: 4 minutes by André Will-Laudien
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
BIGG Digital Assets - The crypto world in sight!
The Canadian security and IT company BIGG Digital Assets is a service provider in the world of crypto - specialized in creating secure conditions for the trade of cryptocurrencies. The history of origins goes back to various security features that were made available to regulators and governments to increase transparency in the trading of cryptocurrencies. For several months the subsidiary "NetCoins", which soon might be the first fully regulated Canadian coin trading platform, has also been on board. Sales have been growing at double-digit rates in recent weeks.
The exciting thing about BIGG is precisely this combination of security software and trading platform. In the new crypto world, customers still have fears of contact, which can at least be alleviated by sound structural conditions and transparency. Meanwhile, 7 crypto pairs are trading, and the number of verified trading activities via BitRank Scores increased to 625 million trades in the third quarter. This shows the high relevance: Already, 5% of the earth's citizens are actively engaged in the crypto markets. Experts expect an average growth (CAGR) of 23% per annum for the coming years.
The researchers of Chainalysis found that 2.3 million humans already use Bitcoin for payments, while more than twice as many, i.e. 4.8 million users, hold Bitcoin as a speculative investment in the hope to obtain a profit. For BIGG, this means increased revenues and a lot of demand for security software. With a valuation of EUR 25 million, BIGG is currently still a small player in the market. Recently, the share price fluctuated somewhat more strongly between CAD 0.25 and CAD 0.33 - with a little patience, there are sound entrances into the crypto world of BIGG.
VISA - Strong numbers, crypto can come!
VISA is one of the largest credit card providers and payment processors in the world. Growth has been rapid in recent years, and there is now hardly a bank on the globe that does not offer VISA products. In 2020, the Company will have sales of around USD 25 billion and net profits of USD 6.5 billion or USD 4.41 per share. Although the dividend yield is modest at 0.6%, the share price has risen by a full 350% over the past 5 years.
The management is considered to be somewhat conservative. Still, since last week a planned takeover has been causing a furore because the US government wants to stop the announced takeover of the Fintech start-up, Plaid, by the credit card giant, which costs around USD 5.3 billion. Last week, the Department of Justice filed an antitrust lawsuit with the federal court in San Francisco because Visa would allegedly gain too much market power through the acquisition. Plaid offers software for linking digital payment apps like Paypal, Venmo or Transferwise with bank accounts.
The intention of such an acquisition seems clear. Due to the pandemic, cashless payment transactions are on the rise with growth rates of 20% p.a. In addition to the standard currency conversion, Visa naturally earns a percentage of every transaction. If you want to be at the forefront in the future, however, you have to be able to integrate modern platforms and apps and master the crypto world. VISA has committed itself to both tasks until the end of 2021. The share is a standard value among financial service providers.
American Express - It should be the Platinum
Which credit card has a higher reputation than American Express? We can only think of Diners Club, the very first and probably most select credit card, founded in 1950 by Frank X. McNamara. 70 years ago, the campaign started with 27 associated restaurants and 200 customers. American Express is 100 years older and has already travelled for its customers by stagecoach. As one of the first major financial service providers, its eventful history dates back to 1850.
The Company became well known when it issued traveller's cheques to secure cash on extended journeys. Traveller's cheques were stamped again at the turn of the millennium, but today the Company issues an unlimited platinum card made of chic metal for the very wealthy customer base. During the financial crisis from 2008 to 2010, however, AMEX got into trouble and was ultimately forced to apply for USD 3.5 billion in state aid from the bank rescue fund.
Since then, AMEX has developed well, and today has a turnover of USD 45 billion and a net profit of about USD 4.2 billion. In the third quarter of 2020, profits fell by 39% to USD 1.07 billion. The poor performance was attributed to a reduced number of transactions due to the pandemic and lower average revenues. AMEX has so far focused primarily on the card business, savings and travel services and bonus programs. In the crypto area, the Company currently only offers the payment function on various Internet platforms for purchasing coins in so-called wallets. A payment function in crypto does not yet exist at AMEX, but the security of a traditional bank does.