Facebook’s Crypto To Bring In $19 Billion in Revenue, Barclays States

Facebook’s Crypto To Bring In $19 Billion in Revenue, Barclays States

Facebook’s Crypto To Bring In $19 Billion in Revenue, Barclays States

According to a report published by CNBC on March 11, Barclays analyst Ross Sandler wrote in a client note that the "Facebook coin" could generate as much as $19 billion in additional revenue by the year 2021.

Assuming cryptocurrency implementation works out for Facebook, Barclays reports the upside to be worth an additional $19 billion in revenue for the company within the next several years, with the base-case, conservative estimate pegged at $3 billion.

Facebook Coin is not the first native currency of the platform.

Ross Sandler, Barclays internet analyst seem to be betting on prospects of Facebook's crypto-project. Whilst not quite the nearly $20 billion upper estimate, the internet analyst's conservative reckoning was still an impressive $3 billion over the same two year period. However, sources say Facebook is interested in developing a blockchain-based virtual currency that would be pegged at 1:1 with traditional currencies like the USA dollar and would support global payments via its WhatsApp messaging app. However, Facebook itself is yet to detail the project. If all goes according to plan, Sandler could see the company extending into the realm of consumer lending, remittance and physical payments, an industry that cryptocurrencies across the market have been attempting to capitalize on.

Over the last few years, Facebook has been hit with a number of scandals relating to their handling of user data, which has taken a toll on its share price. Sandler notes that this is "sorely needed at this stage of the company's narrative".

Sandler added: "Based on our checks, the first version of Facebook Coin may be a single goal coin for micro-payments and domestic P2P money transfer (in-country), very similar to the original credits from 2010 and Venmo today". Now, the digital currency market is more mature which Facebook will likely take advantage of. To put things into perspective, Facebook made total revenue of $40.6 Billion in 2017 where $39.9 Billion came via advertising. The profitability of this early scheme was questionable and it was ultimately shelved, however.

However, the blockchain technology was only beginning at the time and Facebook had to bear all the costs, which, according to Sandler, basically destroyed the whole idea. He highlighted this with mention of the team of blockchain specialists being assembled at Facebook - amongst them, David Marcus, the former president of PayPal.

However, the Barclays analyst did admit to one or two challenges looming for the social network.

A payments business could help the company in staying afloat if another issue or scandal rocks its investors.

Finally, Sandler speculated on the future.

Moreover, this project was supposedly meant to become a virtual currency for in-app-purchases, not entirely unlike a cryptocurrency.

Facebook will have to make an effort in order to create something that will amaze people and prove to all the value of its company, but we can certainly be sure that if Facebook Coin is successful, the world of cryptos as we believe is about to change forever.

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