November 18th, 2021 | 13:23 CET
Commerzbank, BIGG Digital Assets, PayPal: Where it's all about crypto
Table of contents:
Commerzbank: Is there potential here?
The Commerzbank share is currently a shadow in the MDAX. The Company is still struggling with its great legacy. The proud bank has numerous branches, thousands of employees - and is suffering from the low interest rate environment and sluggish digitization. For years, the group has been imposing one slimming cure after another on itself - only to find that branches have to be closed again and employees laid off. But Commerzbank has a second face. The somewhat conservative bank from Frankfurt has been active as a fintech investor for years and has been surprisingly good at it.
When the fintech Marqeta went public in the US a few months ago, some Commerzbankers in Frankfurt must have rubbed their hands. At its stock market debut, Marqeta was worth more than Commerzbank itself. But the bankers' joy did not stem from a form of masochism. On the contrary, Commerzbank had repeatedly invested in Marqeta over the years. In the summer, a three-digit million sum is likely to have landed at the somewhat dusty bank. Marqueta is not an isolated case, as evidenced by numerous other Commerzbank investments around blockchain and other future topics. The share price has barely budged recently despite the successful investments. Investors would do well to favor other stocks.
BIGG Digital Assets: A lot is coming together here
One of these stocks could be BIGG Digital Assets. Admittedly: If you look at the volatility that BIGG Digital Assets' stock has put on the floor in recent months, you might get dizzy. In the past year alone, the share price rose from a penny stock of EUR 0.16 to over EUR 3, only to fall back to around EUR 0.55. In the meantime, the value has stabilized and recently made signs of returning to the upward trend. BIGG Digital Assets primarily has two business segments. On the one hand, the Company develops software to actively counter abuse and money laundering in the crypto sector. The software has a good reputation and is already being used by law enforcement agencies and companies in the financial sector. Just over two months ago, credit card provider Mastercard swallowed BIGG competitor CipherTrace. The parties have agreed not to disclose the purchase price, but industry insiders believe it to be in the hundreds of millions.
The second mainstay of BIGG Digital Assets is its own trading platform Netcoins. The crypto exchange received approval from the Canadian authorities a few weeks ago and thus also officially belongs to an illustrious circle of less comparable offerings in Canada. In the past few months, Netcoins has repeatedly grown by strong triple digits. By the end of the year, more and more currencies should be tradable on the platform. The third pillar of BIGG Digital Assets consists of investments and collaborations. Just recently, BIGG put CAD 100,000 into LQWD Fintech, a company specializing in solutions for the Lightning network institutions. Lightning aims to provide fast payments. Such investments can also pay off indirectly for BIGG Digital Assets shareholders. First, the Company gains insights into new business models and can launch new products itself, and second, a warm windfall beckons if the investment targets are acquired. The BIGG Digital Assets share is an extremely hot potato, but at the same time, it offers excellent opportunities. The business stands on several pillars, and blockchain is trending. Anyone looking for spectacular shares should have BIGG in the back of their mind.
PayPal: The music is off here
One of BIGG's potential customers is PayPal. The payment service provider continues to expand its business with cryptocurrencies. As a result, the requirements to effectively monitor money laundering and similar abuses are also increasing. Last year, PayPal was considered an extremely hot stock for a long time because of the bitcoin fantasy. Today, there is not so much left of this hype. The reason: the market has realized that cryptocurrencies will only be a fig leaf for PayPal for the time being - the significant growth is not expected in the short- and medium-term. The stock lost close to 20% in the past three months and does not look very dynamic, even on a one-year horizon. However, the market position around payment services justifies a long-term commitment for all investors with patience. In the short term, however, no music is playing here.
While cryptocurrencies and blockchain are areas for PayPal to have on its radar for the long term, BIGG Digital Assets is all about crypto. The Company now also holds a comparatively sizable 450 bitcoin holdings and paired with its two business units and speculative holdings, the overall picture is coherent. However, investors should keep in mind that the stock can be extremely volatile. Such fluctuations do not occur at Commerzbank. The downside of this comfortable boredom: It lacks momentum.
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