October 25th, 2021 | 10:37 CEST
PayPal, BIGG Digital Assets, IBM: Crypto becomes a billion-dollar business
Table of contents:
PayPal is rolling up the crypto market
PayPal is an exciting option when it comes to innovative financial solutions. The group has long been more than just eBay's former payment processor. The Company has also started to catch customers offline and is working with retailers, especially in emerging markets. However, PayPal's greatest fantasy is around new services. Although the Company recently discontinued the popular money pool function, which allowed friends, acquaintances or work colleagues to easily "pool" money, PayPal is already looking into new areas. In the UK and the US, users can already exchange their money for cryptocurrencies and store it with PayPal or pay with it. An example from history shows that it pays to be one of the first movers when measured against other large companies.
When Google launched Google Pay years ago, very few banks were ready for it and did not yet offer corresponding credit cards that could be linked to the popular service. In no time at all, PayPal and Mastercard launched a virtual credit card that every PayPal customer could deposit with Google Pay free of charge with just a few clicks and use the service. Before that, numerous transactions in the supermarket or gas station were also carried out via PayPal. Many customers will still have linked PayPal and Google Pay today. If PayPal gets many normal users to invest in cryptocurrencies with this strategy, the Company would also have a foot in the door in this area. The stock is now highly valued, but PayPal remains a leader. Still, there are better stocks for investors.
BIGG Digital Assets: Crypto exchange + crypto security software + 450 bitcoins
Especially if you like things to be dynamic in your portfolio, investors can take a closer look at the stock of BIGG Digital Assets. The Company operates the Netcoins trading platform, which has been certified and officially approved by the Canadian authorities for a few weeks now. Netcoins is showing high growth rates and is expected to add more exciting cryptocurrencies by year-end. It should attract more customers and also further increase BIGG's transaction revenue.
The second pillar of BIGG Digital Assets is the Blockchain Intelligence Group, ensuring that things are done right around digital currencies. Among other things, the Company offers anti-money laundering software and trains investigators and regulators on how to use this software. Traditional companies, such as PayPal that offer cryptocurrencies as a means of payment must also comply with regulatory requirements - for example, when it comes to preventing money laundering. The Blockchain Intelligence Group, therefore, has growth potential. Just a few weeks ago, competitor CipherTrace was acquired by Mastercard. Industry insiders speculate that this purchase price alone could have been in the range of the valuation of the entire BIGG shares at around EUR 200 million - the exchange Netcoins and the now 450 Bitcoins in the Company's portfolio would then be on top of that. The stock has consolidated after a sharp rise and looks promising even against Bitcoin's new all-time high. The share is highly speculative but brings everything that makes for an exciting equity story.
IBM: Do weak figures make acquisitions more likely?
The IBM share shows that it is not only crucial for a company to do "something with digitalization". The tech pioneer of past decades missed the analysts' sales target. Although in the end, it was only a matter of a few hundred million euros with earnings in line with expectations, IBM performed weakly, especially in the promising cloud business. The market is now worried that IBM could miss the boat in key business areas and sent the stock down 10% immediately after the numbers. Large corporations like IBM are often forced to take action in such situations. Acquisitions are an obvious choice.
IBM is also involved in blockchain and announced a collaboration with the financial services provider Stellar.org and the payment provider KlickEX in the summer. The partnership is supposed to involve a cross-border payment system that will also use the cryptocurrency Stellar Lumens. Against the backdrop of the weak figures, it would not be surprising if IBM wants to score points in future-oriented topics and takes a close look at the market of smaller providers of corresponding solutions. Nevertheless, the stock is not very interesting currently - too many unprofitable divisions are waiting to be sold at IBM.
While PayPal is already expensive and IBM has the typical problems of a large corporation, BIGG Digital Assets offers two exciting business segments and an ambitious but still acceptable valuation. With the stock trading three times higher just a few months ago, but the Company now in a better operational position, BIGG Digital Assets remains an exciting choice for equity investors looking for crypto and blockchain exposure.
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