Who will Own the Crypto Super-App?
Michael Spencer
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If you know me a bit you know that I’m a bit of a crypto skeptic. However there is some data that suggests Robinhood is actually a good investment on the dip. They have favorably grown users YOY in a very effective manner.
While I think Coinbase is significantly over-valued, I think Robinhood at around $15.00 is worth picking up. The reason is simple, they have a fair chance of creating a?cryptocurrency super-app.
As you know, people typically spend the most time on their five favorite apps. For some young consumers and investors one of these is likely to be a crypto related super-app that can do many things.
Robinhood’s future app is a likely candidate. That will increase user adoption and strengthen what the company can become and what the company represents, that so-called democratization of finance that’s part of the misled crypto narrative.
One Crypto Wallet to Rule them All
Robinhood’s stock has done what is expected of a growth-stock in a volatile market, it’s corrected with considerable mean reversion.
Peaking at $55, it’s now at $19. It still has a ways go to but, and this is big but. The crypto wallet project could be a breakthrough.
Robinhood currently has a waiting list of 1.6 million people signed up for its crypto wallet that's set to debut in 2022.
Robinhood currently has about?22 million users . Fed QE created a lot of younger investors among Millennials and GenZ. These also happen to be the biggest cohorts in America’s population.
As a rule I don’t trade crypto and have never owned Bitcoin, but to have some exposure to meme-stocks and crypto related companies is something I’m certainly open to.
Robinhood has had a bumpy ride since its July IPO, its price hit $85 per share in August and is trading below $20 per share as of this writing. Like many of the high-growth and stay-at-home stocks of 2020, it hasn’t done so well. If it keeps declining, its movement in 2022 will surprise a lot of people.
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Who has more brand name recognition to be the crypto wallet of the future? Not Block (formerly Square, although the cash app is impressive), not Bakkt (that’s more institutional). Maybe?WhatsApp ? However young people aren’t great supporters of Meta (formerly Facebook) who own WhatsApp.
Coinbase and Robinhood should not have a combined market cap of over $70 Billion, but still - Robinhood has a track-record of user adoption that is the golden ticket to growth. Young retail investors made too much money in 2020 to not continue the habit.
This is Robinhood encroaching on Coinbase’s territory. Coinbase will face just incredible competition in the coming years. But the real war will be to?own the first crypt-super-app. Companies like PayPal or SoFi have an outside chance of doing it too.
Users had previously been able to buy and sell a few cryptocurrencies including Dogecoin and Bitcoin, but had been unable to send those coins to external wallets or receive them from elsewhere. This will make Robinhood’s suite of products more sticky to the crypto generation.
Robinhood is being customer-centric understanding its cohort very well. “We’re planning to operate this business on a break-even basis and we don’t plan to profit from it for the foreseeable future” says Robinhood co-founder Vlad Tenev. “The value of?Robinhood Crypto ?is in growing our customer base and better serving?our existing customers.”
Chainalysis said the integrated partnership with Robinhood Crypto will help the trading app meet compliance requirements ahead of the launch of its crypto wallet, expected to roll out for all users in early 2022.
After?$5.6 billion in funding, ?Robinhood has emerged as a brand GenZ really enjoys. Even for crypto skeptics like me, swing trading the meme mania related to crypto is enjoyable and highly profitable.
Robinhood’s stock is a meme within a metaverse of memes. Yet such brands like Robinhood sometimes reminds you that you have no real choice, you just have to follow the youth into the future. You can sign-up for the crypto wallet here.
The average price target for analysts is $45, for me an entry point is between $13 and 15$ for a swing or long-term play.
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