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There may be a changing of the guard underway in financials. 

The market caps of payment stocks like Visa and MasterCard have eclipsed the value of Wall Street's biggest banks, even as their balance sheets remain significantly smaller in comparison. 

Square, Visa, PayPal and MasterCard are collectively worth $1.

07 trillion, while the "big six" banks, which include JPMorgan, Bank of America, Wells Fargo, Citigroup, Morgan Stanley and Goldman Sachs are worth less than $900 billion in total. 

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A large portion of gains in market value have come in 2020, as investors continue to reward software-based tech companies amid the pandemic. The ETFMG Prime Mobile Payments ETF, which tracks mobile payments stocks, is up nearly 10% in 2020, while the Financial Select Sector SPDR Fund is down nearly 20% so far this year. 

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Payment companies have increased their push into traditional banking over recent years, which investors have rewarded with further share gains. On Tuesday, Square announced that it will allow Cash-App users to access some of their earned wages ahead of schedule, incentivizing users to sign up for direct deposit through the application. PayPal-owned Venmo also allows its users to access earned wages. 

Meanwhile, shares of traditional Wall Street banks have come under pressure amid low interest rates and fears of rising loan defaults as the economy continues to suffer during the coronavirus pandemic.

Related Tags
  • Financial Select Sector SPDR Fund
  • ETFMG Prime Mobile Payments ETF
  • Goldman Sachs Group Inc
  • Morgan Stanley
  • Citigroup Inc

News Source: CNBC

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Bitcoin : Cryptocurrencies and blockchains, traps and opportunities for the insurance sector

In an article entitled “Navigating blockchain opportunities in Insurance” recently translated into French on the Blockchain Partner blog, Laurent Benichou analyzes the mistakes that the insurance sector could avoid and the opportunities it should seize to take full advantage of the new lands unknowns discovered by Bitcoin and explored since by so many other projects.

Extracts:

Bitcoin was created to exchange value without a centralizing third party. Bitcoin’s very goal was to create a digital asset to enable its incensurable exchange. We can therefore in principle doubt that “blockchain technology” is the best answer to objectives too far removed from the principle of decentralized exchange of digital value. When faced with a blockchain project without a token, the added value of the blockchain is most of the time at least subject to debate, and often ends with a technical examination of the differences between a private blockchain and a database. shared […].

The new nature of the blockchain makes it incompatible or difficult to connect to old systems. We can even add that the philosophy of blockchain in its first avatar, bitcoin, is rather to replace old systems. […]. To think that an insurer can whistle the blockchain for help and suddenly see a magician appear improving the insurance process is just a pipe dream. You can’t get value from blockchain if you want to keep all your old systems, all your processes, all the complexity that you need to get rid of.

The insurance industry will soon understand that the most immediate opportunities are not about how Crypto can support Insurance, but how Insurance can support Crypto. The cryptocurrency industry is now very real, with billions of dollars traded every day. This industry needs insurance for portfolios and custodians and has seen products emerge at high prices. [Certaines] insurance companies will certainly end up doing their usual job (risk assessment and coverage) on this new surface (Bitcoin and all other cryptocurrencies) […], it will be difficult for the following ones to catch up with them.

[…] It would also be wise to invest a small portion of insurance premiums in bitcoin to hedge against fiat hyperinflation in the event of a sovereign credit default or bank failure (remember that insurers don’t just compensate in cash, but sometimes with services which may also be subject to a sharp increase in prices in the event of hyperinflation) […]. Even if there is no complete collapse of sovereign currency systems, Bitcoin’s structure (scheduled issuance, reduction in issuance over time, fixed maximum supply) will reassure investors by showing them that it It is an asset that has the power to hold more value in the medium and long term than fixed rate assets, and which therefore constitutes a clear hedge against the fall in the values ​​of sovereign currencies. And this, whatever the critics say about the “volatility of bitcoins”.

To read on blockchainpartner.fr

Original article in English: medium.com/@laurentbenichou

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