Visa – Under the Radar Blue Chip Crypto Play By TipRanks
Can investors get exposure to the promising but volatile world of cryptocurrency and blockchain technology via a blue chip, mega cap company? Shares of Visa (NYSE) may offer potential investors that opportunity, despite being unlikely.
Although the global payment technology company, valued at $490 billion, is well-known for its credit cards and payments network, Visa has made recent inroads into crypto as it looks to the future. (See Visa stock charts on TipRanks)
While Visa recently grabbed headlines with its purchase of a Cryptopunk NFT (non-fungible token), there is more going on underneath the hood. The NFT was purchased by Visa for 49.5 Ethereum (ETH-USD), or approximately $150,000 when it was first bought. It pointed to the fact that due to the increased interest and demand in the space, the company wants to help its “clients and partners participate.” Furthermore, it said that participating in this transaction equips Visa with “a firsthand understanding of the infrastructure requirements for a global brand to purchase, store and leverage an NFT.”
Jarrod Dicker of the Chernin Group told CNBC, “For the first time in a long time, we have an entirely new internet-native business model…for a company like Visa coming in really trying to focus on the future of commerce and transactions, it makes absolute sense for them to start playing around and socializing the notion that this could be a new way to transact, this is the new way of commerce.”
For its part, Visa’s head of blockchain technology stated, “We think NFTs will play an important role in the future of retail, social media, entertainment, and commerce.”
Crypto-Linked Credit and Debit Cards
Beyond NFTs, Visa has been working to partner with dozens of crypto platforms to offer crypto-linked credit cards, and reports that in the first half of 2021, over $1 billion has been spent using those cards. Visa also developed USDC, the stablecoin that converts to US dollars and has partnered with Circle. Visa also invested in Anchorage’s Series B round. Anchorage is a digital currency security company.
While revenues derived from cryptocurrency and blockchain technology are obviously not a huge part of Visa’s overall revenue mix today, it is good to see that it isn’t resting on its laurels as a current leader in global payments.
Visa will continue to invest in order to be the market leader. Visa is not content to become the payment version of the horse-and-buggy company.
Performance and Analyst Ratings
Shares of Visa are also down about 10% from their 52-week high, and offer a dividend, albeit a small one. The stock is considered a strong Buy by the analysts. 19 of 20 analysts that have been covering it over the past three months gave the stock a Buy rating. The average Visa price target is $280.75, about 21% above today’s prices.
Outside of crypto, Visa’s core business has also been registering plenty of wins over the past few months, whether it was beginning a new co-brand relationship with MercadoLibre (NASDAQ:), Indian payments giant Paytm issuing a virtual Visa debit card, or Google Pay (NASDAQ:) rolling out a virtual Visa card.
As global travel restrictions continue to relax, Visa is expected to reap the benefits of increasing cross-border payments volume. The Visa report states that most countries have returned to their pre-COVID outbound travel levels.
Overall, Visa is a sensible way to get some exposure to crypto and emerging blockchain technology, while investing in a blue chip company that is firing on all cylinders in its core business.
Disclosure: Michael Byrne had no position at the time this article was published.
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