- Analysts from Barclays have predicted that the potential cryptocurrency from Facebook could bring in up to $19 Billion by 2021
- The coin would most likely be a stablecoin
- While this will be their first crypto, Facebook has previously attempted to launch a digital currency
Many mainstream firms have dipped their toes into cryptocurrency, with the latest being JP Morgan which announced the upcoming launch of their JPM coin a few weeks ago. However, few firms are being watched by the crypto community as closely as Facebook, from the rumors of them launching their own coin that circulated last year to their recent acquisition of Chainspace.
While there has been no official news from Facebook about their rumoured token, analysts continue to speculate. The latest piece of information is from a Barclays analyst who claims that the should Facebook launch its own coin, it will be extremely profitable.
This information comes courtesy of Barclays internet analyst Ross Sandler, who said in a client note that the hypothetical coin could bring in as much as $19 Billion by 2021. At the very least, Facebook could see a revenue increase of $3 Billion through the launch of a successful crypto offering:
“Merely establishing this revenue stream starts to change the story for Facebook shares in our view.”
That estimate was made by considering the current revenue from Google’s digital distribution service, which brings in about $6 per user.
The persistent belief is that the coin will work as a global payment initiative that will be backed by the US dollar and will be tied to their popular WhatsApp messenger. The use of the dollar to back up the coin will be an attempt to combat crypto’s volatility, especially in light of the bear market. It will also be a way to stay on the good graces of investors, who were irked last year following the Cambridge Analytics scandal that rocked the company. “Any attempt to build out revenue streams outside of advertising, especially those that don’t abuse user privacy are likely to be well-received by Facebook’s shareholders,” Sandler said.
First Facebook crypto, but not their first digital currency
Interestingly enough, this is not Facebook’s first foray into digital currency as back in 2010, they unsuccessfully tried to launch Facebook credits, in which users would pay for virtual currency with fiat currency and spend it in-app.
The issue, at the time, was that the company could not deal with the exchange costs. Now, the digital currency market is more mature which Facebook will likely take advantage of.