Barclays Analyst: Facebook Cryptocurrency Could Generate Revenue of $19 Billion

Barclays Analyst: Facebook Cryptocurrency Could Generate Revenue of $19 Billion

An addition to the revenue in the scale of billions could help Facebook regains its success in the stock exchange and possibly even outrun Apple stock. The company's income is nearly fully dependent on advertising revenue now.

"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", the analyst added.

Reportedly, the Mark Zuckerberg-led firm has yet to make any official announcement concerning its crypto ambition.

WhatsApp cryptocurrency can debut in India's remittances market, where about 200 million people use the application, as per a Bloomberg's report.

According to its report, Sandler and the Barclays team forecast that Facebook will gain at least $3 billion annually from this year till 2021 if the Facebook coin is launched.

It's not yet clear when Facebook will launch their stablecoin, but it isn't likely to be soon since Facebook is still working on their strategy. Publishers would be willing to "re-establish themselves as partners" if Facebook uses the crypto for micropayments.

The Social Media giant and the cryptocurrency sector have come a long way since then.


Sandler added: "Based on our checks, the first version of Facebook Coin may be a single objective coin for micro-payments and domestic P2P money transfer (in-country), very similar to the original credits from 2010 and Venmo today".

As CNBC points out, Facebook's decision to rely upon a stablecoin format for their upcoming currency, which will rely on the value of several different fiat currencies, should be more attractive to investors and users given the highly volatile state of cryptocurrency prices. In 2010, it launched Facebook Credits, a virtual currency similar in some ways to modern cryptos.

The venture wasn't successful and fizzled out after a while. The company took it upon itself to settle these costs, and this ate into the profits.

Moreover, this project was supposedly meant to become a virtual currency for in-app-purchases, not entirely unlike a cryptocurrency. It has also acquired WhatsApp and Instagram, with the latter offering a big platform to publish content. He and the team at Barclays predict that the stablecoin that will be launched by Facebook will have the markings of the original Facebook credits which has only one objective.

With all this in mind, Sandler believes that the new crypto could bring in $19 billion for the firm by 2021.

Barclay's analysis is based on revenue estimates off of the Google Play Store, the digital distribution service platform Android OS which generated $6 net revenue per user. To put that estimate in context, the Menlo Park, California, company brought in $40.6 billion in total revenue in 2017, with $39.9 billion from advertising.

However, the blockchain technology was only beginning at the time and Facebook had to bear all the costs, which, according to Sandler, basically destroyed the whole idea.

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