Is this the beginning of the end for cryptocurrency?
This is more likely the beginning of a long crypto winter. The recent bankruptcy of a large industry player is likely to leave a sour taste in the mouth of retail investors, and may cause institutions to delay plans to engage in the industry. Our Mizuho proprietary survey of Bitcoin (BTC) investors on the Coinbase platform indicates that the majority of retail traders are now likely “under water” on their crypto investments, with BTC trading around ~$17K and the average investor reported to have purchased BTC at ~$20K.
Who could be hurt/benefit from the disruption at some of the more notable crypto exchanges?
Among fintech names, Coinbase Global (COIN) is vulnerable given its dependence on crypto. While less competition may help COIN in the short run, the rapid fall from grace of a major exchange demonstrates how fickle the industry can be. Robinhood Markets (HOOD) could ultimately benefit as retail traders switch from crypto back to day trading in stocks, which is their core business.
Aside from crypto, what are the biggest trends in fintech?
Real-time payments facilitated by the Federal Reserve … FedNow is expected to be live in 2H23. FedNow would offer a potentially cheaper alternative to the traditional payment ecosystem, and could be particularly beneficial for companies whose primary cash flow isn’t from debit, such as SoFi (SOFI) and Affirm (AFRM).
What is your family’s favorite payment method for personal purchases?
Apple Pay … Apple pay is accepted at 85% of all US retailers, making it among the most widely-accepted and convenient forms of payment. Owning the form factor – the iPhone – gives Apple a significant advantage over other checkout methods.
Do you foresee a completely cashless society one day, or will cash always be preferred by some?
Yes, I see a cashless future. Just take a look at the Nordic countries, like Sweden – these countries are, essentially, already cashless. I believe we are headed in that direction.