Wednesday, March 20, 2019

Barclays Analyst Predicts $19 Billion Revenue From Facebook Cryptocurrency by 2021

Ross Sandler, a Barclays internet analyst, has predicted that if Facebook’s proposed cryptocurrency is successful, then the company stands to generate additional revenue of $19 billion by 2021. The new revenue source may be much needed due to the scandal the social media has faced and its declined share price, reports CNBC on March 11.

Facebook Can Realise $19 Billion Through Launching Its Cryptocurrency

Per the report, the Californian-based social media company, Facebook can realize $19 billion by 2021 through its offer of a Facebook coin. The latter is a cryptocurrency that is yet to be launched, and reportedly, it will be used for global payments. The coin will also be offered on its platforms such as Whatsapp.

Therefore, Ross Sandler noted that this revenue might be the case if the asset goes according to plan. For starters, it will be a stable coin that is backed by currency such as the U.S. dollar. That being the case, it will attract investors who are reluctant to invest due to the volatility of the market.

Sandler also outlined that the conservative revenue estimate is around $3 billion. According to him, these values were arrived at by considering Google Play, where a $6 “net” revenue is generated per user. Thus, he believes that this may be the case by 2021 following the launch of the Facebook coin which will be offered to over 3 billion users of the social network.

Facebook’s Revenue Records a 30 Percent Increment

Reportedly, Facebook’s revenue has seen a 30 percent increase this year even though it has been affected by the recent scandal surrounding its platform. One of such Cambridge Analytica, a British political consulting firm which obtained data from about 50 million user accounts without their consent. Therefore, having another source of revenue may be a good plan in case the company’s investors become less forgiving.

On the other hand, the media also revealed that Facebook, ten years ago, had made plan’s to launch “Facebook credits” that will be used for in-app purchases. The credits are also similar to virtual currencies, and before its use, customers will have to buy them using their debit or credit card.

Nonetheless, it was outlined that Facebook will have to bear most of the interchange costs between fiat and the virtual credits. As such, it will only end up eating into the company’s profit. In Sander’s own words, it “negatively impacts the profitability of the business, especially when making high volumes of lower-value transactions.”

Facebook Purchase Blockchain Company, Chainspace

Although the social media company is yet to confirm its launch of a cryptocurrency, actions it has taken of recent has given people the impression. For starters, Chainspace, a blockchain company was purchased in February this year.

In December, the company listed some blockchain positions that can be occupied. Later in February, more positions were added, and some of these are Blockchain Product Designer, Brand Strategy and Insights Manager, and Mixed Methods UX Researcher.

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