December 1st, 2021 | 13:53 CET
Square Inc., CoinAnalyst, Coinbase - The crypto wave is unstoppable!
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The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.
Square Inc. - Bitcoin as a field of the future
Jack Dorsey is a jack-of-all-trades: born in Saint Louis, Missouri, in 1976, he programmed an open source scheduling software for cab operators at the age of 14, some of which is still in use today. In 2006, he invented the short message service Twitter. But because founding a billion-dollar corporation is not strenuous enough, he went one better in 2009 with Square Inc., one of the world's most successful payment service providers. At the same time, Jack Dorsey is one of the advocates of a sharing community. He is a self-confessed fan of the independent and decentralized cryptocurrency Bitcoin. Square itself invested large sums in Bitcoin in the past; as of the end of Q3, the portfolio stood at USD 352 million. The portfolio value is currently around USD 540 million.
In addition to the announced development of hardware wallets and a planned entry into Bitcoin mining, Square, via whose best-known product, Cash App, trading in Bitcoin is already possible, has announced that it will push ahead with the development of a decentralized trading platform for the cryptocurrency. The fact that this has not yet happened is due to Bitcoin or the underlying blockchain itself. As one of the cornerstones of blockchain technology, it is poorly scalable and simply too slow to run a peer-to-peer exchange directly over it. That is why all current trading platforms make do with a trick: the transaction is not processed directly via the Bitcoin blockchain but via the Ethereum blockchain, which was designed for peer-to-peer applications from the very beginning. Changing this is the mission of Square's new TBD business unit.
Recently now, Square came up with mixed Q3 figures. The consensus EPS expected by analysts was exactly hit at USD 0.37, but revenue was well below expectations at USD 3.8 billion (USD 4.4 billion). The volume of all transactions processed via the Square platforms, on the other hand, was around 1.5% higher than analysts had estimated in advance, at USD 45.4 billion. Incidentally, they continue to assess Square's newsflow as predominantly positive and see an average target price for the share of around USD 290, which corresponds to a potential of about 37%.
CoinAnalyst - Global launch of the Crypto Intelligence newsletter
German companies, such as Bitcoin Group or Advanced Blockchain Technologies AG, have also been active in the field of blockchain, distributed ledger technology and cryptocurrencies for quite some time. A relatively new player in this environment is CoinAnalyst. Initially founded in Frankfurt am Main, the Company has since changed nationality via a reverse IPO. It is now listed on both the Canadian CSE and in Frankfurt via CoinAnalyst Corp. The Company, which uses artificial intelligence (AI) to analyze messages and related sentiments on social media sites from both investors and influencers, currently has a market capitalization of just under CAD 17 million with about 80 million shares outstanding.
The Company is not new to the business but already has a long history of providing sentiment analysis services to various Fortune 500 companies. This experience is important for learning and developing AI correctly. Now that the Company has been successful for some time with the products "Insights", "Copy Trading," and a German-language "Crypto Market Letter", the global rollout of the newsletter has been decided.
Furthermore, developing a mobile app combined with a subscription model for the dedicated crypto trader is in the starting blocks. According to COO Andrew Sazama, this is to be launched as early as Q1/2022. Spurred on by the performance of the "Copy Trading" product, which gave investors an average return of around 60% p.a., this area is also to be expanded further. In addition, the Company is also turning its attention in the future to the area of non-fungible tokens (NFTs), which is making a name for itself as a forward-looking way of securing rights to works of art using blockchain technology. Again, sentiment analysis should predict the performance of such NFTs. Overall, management is very confident in its positioning and expects revenues to increase to CAD 17.09 million in 2023, following revenues of CAD 0.9 million in the current fiscal year.
Coinbase - Things are happening in leaps and bounds!
Another company that has the coin in its name is the US trading platform for cryptocurrencies Coinbase. For some time now, the Company founded by AirBnB developer Fred Ehrsam and Goldman Sachs currency trader Brian Armstrong has been going from strength to strength. Last week, the Company announced it was acquiring well-known crypto wallet provider BRD. Their own utility token, "Bread," then went through the roof and increased by more than a fabulous 500%. One reason for the takeover was certainly that BRD is also behind the Blockset integration platform, which enables financial institutions to offer scalable custody solutions with its single-source API. Coinbase will also be able to benefit from this in the future.
The announcement of the sporting goods manufacturer Adidas via Twitter to cooperate with Square was impressive. Experts believe two approaches are possible: first, Adidas could open up for crypto payments in the future, and Coinbase could take over the function of a payment service provider. What seems more likely, is also about the area of non-fungible tokens (NFTs). Here, Coinbase had recently reiterated ambitions to develop its own NFT trading platform when presenting its latest quarterly report.
Recently, Coinbase announced - also via Twitter - the acquisition of the Israeli security company Unbound Security. Founded in 2015, the Company is considered a pioneer in crypto key management and security, particularly multi-party computation (MPC). Coinbase has stated on the transaction that it considers MPC as a key to secure trading venues for cryptocurrencies, NFTs, etc.
Crypto remains an exciting future field from which investors can profit massively. Those who find speculation with Bitcoin too risky due to volatility should rather bet on shares. Investors cannot really go wrong with a big player like Square or Coinbase at the moment. Those who do not mind a little more thrill should take another look at a Big Data pioneer like CoinAnalyst. After all, even Palantir started very small.
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