Crypto and the Ghosts of the Past - Will they knock again?

  • Dec 23, 2019 AEDT
  • Team Kalkine
Crypto and the Ghosts of the Past - Will they knock again?

The cryptocurrency market has bounced back to existence after being dogged by low trade volumes for successive weeks.

Those who had penned off the cryptocurrency market can anticipate this impetus to persist in the near term. Bitcoin and cryptocurrency markets are enormously unpredictable yet unbiased as compared to the most mainstream indicators that includes traditional currencies, shares, commodities and stocks. After going through a rough patch with the onset of 2018, the Bitcoin price, has shown good signs of recovery in 2019. In July 2019, the world’s largest cryptocurrency, Bitcoin rushed to its highest level touching around $13,000.

The other crypto cohorts including Bitcoin cash, Ethereum, and Ripple’s XRP have also provided significant improvements in the last few months.

Trend Showing Bitcoin in the Past-One Year (Source: Yahoo! Finance)

What is Bitcoin?

Bitcoin is a digital currency which provides smaller transaction fees as compared to old online payment systems. This technology is controlled by a decentralised authority, dissimilar to government-issued currencies. An ever-increasing demand has underscored Bitcoin’s scalability. Bitcoin had skyrocketed up to approximately US$20,000 per coin in 2017. The virtual coin is now trading at around $7,600 on 23 December 2019 (as at UTC -5) 23:29 and has a market cap of $138 billion.

Bitcoin & Blockchain Boom

According to the latest report from Delphi Digital, Bitcoin price is poised to rise further. A global economic slowdown could soon come knocking. During an economic downturn, value of major currencies goes down. However, the crypto currency space would be an interesting space to watch out for.

Currently, one may not have faith in the arguments relating to economic slowdown. Still, one cannot overlook the reality that numerous Wall Street major players are eyeing in cryptocurrencies and blockchain technology. And this optimistic approach towards Bitcoin is set to drive digital assets.

In 2019, Blockchain technology is likely to come out of the spectres of crypto currency like bitcoin. The technology is being promptly implemented by plenty of industries via schemes undertaken by technology giants like Microsoft, PayPal and such.

It is a well-known fact that blockchain is safer than traditional technologies in finishing a transaction in the lack of manual processing. One of the most attractive features of this technology is certainty of secured storage and communication of data through a dispersed database.

Moreover, the system is transparent and incorruptible, which provides unaffected data and information. Since blockchain utilises a dispersed consensus, it becomes very hard to alter the records without getting caught. These features make the system enormously safe and secure.

Few Trends to Watch For

Per media sources, the worldwide blockchain market is predicted to increase at a CAGR of 42.8% from a period of 2021 to 2023. This will lead to US$19.9 billion in worldwide revenue by 2023. The increase was primarily backed by Financial Technology (FinTech) companies, which are planning to invest a part of their total investment in blockchain technology.

3 Best Picks

If you are seeking to make money from the soaring bitcoin trend, you may deem to pick companies that are making use of Bitcoin and technologies that support it, including blockchain.

In this context, we have selected three crypto related stocks that uses blockchain technology and are expected to gain from these factors.

PayPal Holdings, Inc. (NASDAQ: PYPL)

PayPal Holdings, Inc. is one of the Bitcoin-related companies that should be on your locator. The technology-based company offers online payment solutions. The digital payments platform is based on a network where both the parties should have PayPal accounts with stored balance functionality.

The company had inked a deal with three major bitcoin payment processors- BitPay, GoCoin and Coinbase, to aid PayPal merchants receive Bitcoin as a mode of payment.

Highlights for Third-Quarter Results 2019: The company reported non-GAAP earnings of 61 cents per share in the third quarter, which increased 5.2% on a year-over-year basis. The company’s net revenue soared 19% year over year and came in at $4.378 billion. Robust implementation of Venmo and One Touch drove revenue for the quarter. The company’s operating expenses came in at $3.7 billion during the quarter, up 15.3% year over year. Non-GAAP operating income came in at $1.03 billion, up 30.4%.

Outlook: For the coming quarter, PayPal anticipates revenues to be between $4.89-$4.95 billion. The company expects Non-GAAP earnings to be in the range of 81-83 cents per share.

Stock Performance

PayPal Holdings has a market cap of $127.69 billion with a one-year target EPS of 126.9x. The stock closed at $108.75 on 20 December 2019, down by 0.12% relative to the previous close.

Facebook, Inc. (NASDAQ: FB)

Facebook allows people to share thoughts, connect to each other, discover and communicate on mobile devices and personal computers.

One of the most visited social media websites had disclosed its plan to unveil its own blockchain-based cryptocurrency. The currency will be known as Libra and will be run by Calibra, the latest Facebook subsidiary. However, we have to wait and watch whether the social-media giant will be able to come out with this technology as per its plan in June 2020, amid enormous search and dwindling partner base.

The company had also acquired Chainspace to strengthen the blockchain division. As per sources, Facebook is looking ahead to instil blockchain-based certification for website log in.

Highlights for Third-Quarter Results 2019: The company delivered third-quarter 2019 earnings of $2.12 per share during the quarter, an increase of 20.2% year over year. It reported revenue of $17.65 billion, which increased 28.6% on year over year basis. Markedly, the company’s employee base grew 28% to 43000 on a yearly basis. Operating income stood at $7.19 billion during the quarter, up 24.3% year over year.

Stock Performance

Facebook has a market cap of $588.32 billion with a one-year target EPS of 238.48x. The stock closed at $206.30 on 20 December 2019, up by 0.12% relative to the previous close.

Microsoft Corporation (NASDAQ: MSFT)

An American-based multinational technology company, Microsoft Corporation is engaged in developing, manufacturing, licensing, and selling of computer software, consumer electronics, personal computers, and hardware and online services.

Microsoft’s Azure-powered blockchain solutions are obtaining robust implementation. The major growth drivers are its flexible usage and its availability of secure broad-based solutions.

The GitHub acquisition is touted to be the largest open source repository providing Microsoft enough experience for the expansion of its strong blockchain tools.

The above stated aspects are expected to provide the company a competitive edge over other cloud rivals like Amazon Web Services (AWS) and Alibaba Cloud that are eyeing the blockchain-as-a-service market.

Highlights for First-Quarter Results 2020: Microsoft Corporation posted first-quarter financial 2020 non-GAAP earnings of $1.38/share, a rise of 21 percent year over year. Revenue for the quarter came in at $33.055 billion, up 14% year over year. Strong execution and robust demand from customers for hybrid cloud offering positively impacted the quarter. The company exited the quarter with cash and short-term investments standing at $136.6 billion as compared to $133.8 billion noted in the prior quarter.

Stock Performance

Microsoft has a market cap of $1.20 trillion with a one-year target EPS of 163.13x. The stock closed at $157.41 on 20 December 2019, up by 1.09% relative to the previous close.

A few Australian-based companies to watch out for in the blockchain space includes of Fatfish Blockchain Limited (ASX: FFG), DigitalX Ltd (ASX: DCC), Security Matter Limited (ASX: SMX).

To know more about Bitcoin and stocks specialising in blockchain technology, click here.


Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. The above article is sponsored but NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) under discussion. We are neither licensed nor qualified to provide investment advice through this platform.

 

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