A Barclays internet analyst announced in a report on Monday detailing the possibility of Facebook (Ticker Symbol: FBWealth Strength IndexFB is Moderately Flat and trending Up) generating billions in revenue if it were to develop a cryptocurrency to use for peer to peer payments. The social media giant is said to be developing “Facebook Coin,” a cryptocurrency that could earn it billions of dollars. If Facebook Coin works, it could be an extremely lucrative revenue opportunity, to go along with Facebook’s giant revenue stream it collects from advertising. Barclays internet analyst Ross Sandler has forecasted that Facebook could earn as much as $19 billion dollars by 2021 from Facebook Coin.
This isn’t the first time Facebook has tried some form of a virtual payment method. In 2010 Facebook took a shot at creating, “Facebook Credits,” which were similar to the cryptocurrencies that we see today. Needless to say, Facebook was a bit before its time on this and couldn’t gain the following it needed and did away with the program. Now cryptocurrencies are a much more ripened and progressed asset class becoming accepted more and more globally.
The company has a much broader user base now that includes millions of more users and two extremely popular apps, Whatsapp and Instagram, that it has acquired since then. Facebook is developing “Facebook Coin” to use for its millions of users. It will be tied to the value of traditional currencies and available first through its messenger Whatsapp, which boasts over 200 million users.
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The chart above is a chart of Facebook from 2018 to the present day. In 2018, Facebook was caught using unethical data mining and distribution practices with its users’ private information. Facebook lost many users trust due to its invasion and distribution of their private information. Facebook now wants its users to not only trust them with their privacy but also now the security of their money and financial information! This seems like an uphill battle for Facebook to have to overcome, just following the aftermath of the privacy sharing scandal.
Above is the long term weekly chart of Facebook since its $42.05 Initial Public Offering on May 14th, 2012. Since then, Facebook has been a phenomenal stock to own. Facebook continually beat Wall Street’s consensus for earnings per share and revenue estimates. It was proving to the street they could make money. Since its IPO the stock has been on a tear returning, at its peak, if you bought the IPO, around 500%.
Throughout its short history, Facebook has set the tone as the top social media player. They have made tactical investments buying up competitors and companies that pose threats entering its space. These maneuvers have made Facebook executives look like visionaries within the social media space. Will the move into cryptocurrencies, like Facebook Coin pay off? Facebook no doubt has a strong user base within Facebook, Facebook Messenger, Whatsapp, and Instagram to tap into if the launch of Facebook Coin were to be a success. Will it catch on and become a success? Stay tuned as we’ll be watching!