December 14th, 2021 | 13:43 CET
PayPal, CoinSmart, Deutsche Bank: Crypto Crash? Where opportunities lurk now!
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At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
PayPal: What is going on here?
PayPal is anything but a blockchain stock. But PayPal already made it big in the financial industry's first digitization push. With it came a unique market position. Today, anyone who wants to shop online or send money to friends usually does so simply and easily with the PayPal app. It is easy to expand into new areas if you have such a solid market position.
PayPal announced many months ago that it wanted to expand into cryptocurrencies. Britons have been able to buy cryptocurrencies via PayPal since the summer. Additional services around the sought-after technology are not excluded. Since PayPal already has many customers, the Company could open the door to the new digital world for many people interested in crypto. In the end, PayPal and also the entire crypto scene would benefit. PayPal's stock is trading about 6% lower today than a year ago. That indicates that the Company has arrived in the financial establishment, and the share price no longer has such great potential.
CoinSmart: Crypto cowboys and low valuations
In contrast, CoinSmart's stock should have great potential - at least if you believe the comments of CoinSmart's Justin Hartzman. In a recent interview, Hartzman expressed optimism about his Company's share price potential and backed this up with figures: "CoinSmart is currently valued at slightly more than twice its revenue. For Voyager, this value is over 10, and for Netcoins, it is even around 14. Of course, companies are not easily comparable 1:1 with each other, but we do not consider this discrepancy justified. Unlike our competitors, we have a positive net result and a strong user base with more than 120,000 customers. To catch up with the competition on market valuation alone, our market capitalization would have to multiply," Hartzman said. CoinSmart was founded a few years ago and sees itself as a full-service provider around cryptocurrencies. That includes trading, custody and other services.
For the future, credit cards, tokenization of tangible assets, NFTs and derivatives and margin trading are planned for active traders. CoinSmart follows the principle of "Regulation First," which means that wherever the Company wants to operate, it will seek regulation first. "At CoinSmart, we do not see regulation as a necessary evil. We believe that a regulated business convinces customers and, in the long run, creates the trust that financial products should also stand for. Many of our competitors have been acting like cowboys in recent years, offering services without permits," Hartzman said. In the long run, that wouldn't pay off, he said, because existing regulations are essential for expansion into new markets. Currently, CoinSmart operates in forty markets, including the EU. Starting next year, the Company plans to aggressively court customers. Hartzman's team is confident that they can win over these customers with CoinSmart's good service. The Company has been on the stock market for a few weeks only and was punished in the wake of the crypto crash. The team seems committed, the business model plausible. The stock is worth a look.
Deutsche Bank: The momentum is missing here
At least for German investors, the Deutsche Bank share is always in focus. The once-proud financial institution has been a mere shadow of its former self for years and often only makes headlines with scandals. However, the German bankers have discovered the market of cryptocurrencies for themselves. The bank sees the asset class as too important to be ignored and lets people have their say on its website who speculate that Bitcoin could become the "gold of the 21st century." However, Deutsche Bank's actual business has little in common with the dynamics of Bitcoin and Co. Although it went up for a while, mainly because of the good business in investment banking, the share has started to languish again. Over three months, it has only risen by a meager 1%. That is not the way to attract investors.
While PayPal's market position gives it a good chance of benefiting from the rise of bitcoin and blockchain, Deutsche Bank could suffer from the technology. In contrast, the Canadian Company CoinSmart has dedicated itself entirely to crypto. Here, regulation, good service, and vision ensure that customers and shareholders are happy. The recent crypto crash could be an opportunity.
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