When Facebook acquired WhatsApp for $19 billion in 2014, there was a lot of debate over the hefty price that company paid for the deal. Fast forward to this day and it looks like the company has found a method to recoup its investment in WhatsApp. And that method goes through the path of cryptocurrencies. If you have been monitoring the news related to crypto space, you might have noticed that Facebook’s rumored cryptocurrency has been attracting a lot of press coverage in the recent days as its launch is just around the corner. And now a Barclays analyst has predicted that the same cryptocurrency may help Facebook earn as much as $19 billion in revenue by 2021.
Facebook has gone through a difficult time in recent months. After a series of scandals that unfolded last year company’s share price declined for several months. Charts reveal that it had gone down as much as 40% from its all-time high of $209 in June 2018 to $124 in December last year. Now after the news of company’s entry in crypto space broke out, its share price has also recovered up to 39%. Currently it’s trading around $172, and hopefully it may go up further after the launch of Facebook coin. Writing about the subject in his report Barclays analyst Ross Sandler said that at the current stage a crypto-based revenue stream for the company is the need of the hour. He said that any advertising-free revenue stream will be welcomed by the company’s shareholders, and his most conservative revenue estimate for the new coin is $3 billion.
Sandler recalled Facebook’s initial steps taken towards the development of a payment project. The project, called Facebook Credits, was similar to what company may launch in the form of cryptocurrency today. It used to allow the users to purchase prepaid credits that could later be used for in-app purchases. The first version of Facebook’s upcoming coin may be very similar to those Credits, he said, with use-cases being limited to micropayments and p2p money transfers. However, later other use-cases may also evolve as this time Facebook seems to be working on a larger design, he added. Facebook’s head of Blockchain and Crypto team, David Marcus, is former President of PayPal. Moreover, the company has also hired dozens of crypto and blockchain related employees from blockchain startup Chainspace.
It will be very interesting to see how Facebook’s secretive stablecoin works in action. The company is reportedly planning to succeed where Bitcoin failed, and reportedly the first market where it wants to try the new coin is India. Let’s see how far it goes!