Billionaire investor and CEO of Social Capital Chamath Palihapitiya has predicted that traditional payment processors like Visa Inc V and Mastercard Inc MA will lose out to emerging crypto projects in 2022.
What Happened: In a recent episode of the All-In Podcast, Palihapitiya went on record to say that he predicts the “biggest business loser for 2022” will be Visa, MasterCard, and the ecosystem that surrounds traditional payment rails.
He went on to describe what he foresees will be the “most profitable spread trade of his lifetime.”
"Be short these companies and anybody that basically lives off of this 2 or 3% (transaction) tax, and be long well-thought-out, Web3 crypto projects that are rebuilding payments infrastructure in a completely decentralized way," he said.
Palihapitiya admitted that while a lot of the existing “scammy crypto projects” would likely go to zero, the more well-established projects with real utility in the space are worth betting on.
"If you read the whitepapers of these crypto projects, and you systematically put together a framework, I think you can be long those, and you can be short Visa/Mastercard because I think this is their peak market cap.”
What Else: Visa and Mastercard themselves have recently ventured into the blockchain and crypto space.
In December, Visa announced it would launch a crypto advisory practice to help its clients navigate their crypto journey.
Meanwhile, Mastercard has been actively helping prominent Ethereum ETH/USD developer Consensys launch a new privacy-preserving solution for the Ethereum blockchain.
Price Action: Visa shares were down 0.48% in 2021, while Mastercard gained just 2.23% over the course of the year. The two stocks underperformed the S&P 500 which rose 28.79% over the same period.
Related Link: Stock Wars: Mastercard Vs. Visa
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