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Is $MQ Paving the Way for Cryptocurrency Integration in Fintech? 🅱️ 💳

Updated: Jul 26

Is $MQ Paving the Way for Cryptocurrency Integration in Fintech? Despite a substantial decline from their IPO price, Marqeta's innovation in payment infrastructure presents a unique investment opportunity. With a pioneering platform providing flexible card issuing and payment infrastructure solutions, Marqeta is poised to change the face of digital transactions. In particular, Marqeta's role within the cryptocurrency industry positions it at the forefront of a significant shift in global financial transactions. However, Marqeta does face some challenges, including falling revenue growth and gross margins. Despite market short-sightedness, Marqeta's resilience and forward-thinking strategies position it as an exciting investment prospect Marqeta's revenue growth has taken a hit, falling from a strong 53% YoY in Q1 2023 to an expected 20% compounded annual growth rate in Q2 2023. Moreover, gross margins have fallen by 400 basis points YoY. This reduction, largely due to the increase in transaction processing expenses, has raised some eyebrows, especially when coupled with the company's strategy of using its healthy balance sheet for share buybacks. The weak points in Marqeta's armor have now been exposed, and this could very well set the stage for a rebound in its stock price. Investors who have stuck with the company through thick and thin are unlikely to abandon ship now, and any positive news could trigger a spike in the stock. It's essential to acknowledge that Marqeta is an undisputed leader in digital payments. Its innovative platform has been a game-changer, laying the groundwork for popular consumer finance apps such as Square's Cash App. The promising business bookings in Q1 2023, matching the entirety of H2 2022, are a testament to this fact. What's more, the company's projections for H2 2023 and into 2024 forecast gross profit growth rates exceeding 20%, eventually rising to 30%. Turning to Marqeta's position in the cryptocurrency industry, its innovative technology is well-aligned to capitalize on the shift towards digital assets. Cryptocurrencies offer a unique proposition for Marqeta, enabling instant and secure transactions while mitigating the risks associated with traditional financial intermediaries. Given the growing acceptance of cryptocurrencies among businesses and consumers alike, Marqeta's role in this sector becomes a significant asset in its growth strategy. A prime example of Marqeta's potential within the crypto sector is its partnership with Coinbase, one of the world's largest cryptocurrency exchanges. The partnership resulted in the issuance of the Coinbase Card, which allows users to spend their crypto as effortlessly as the money in their bank. With this, Marqeta solidifies its role in bridging the gap between digital and traditional financial systems. Marqeta's tech has attracted partnerships with high-profile businesses like $C, $AFRM, $UBER, $WMT, and $COIN. Backed by its strong product-market fit, global sales efforts, and a healthy cash reserve, Marqeta is primed to bounce back from its recent hiccups and resume its rapid growth trajectory. Marqeta's strategic acquisition of Power's credit program management capabilities and its diversified offerings have resulted in a comprehensive platform that caters to a broad range of credit needs. This evolution, coupled with ongoing improvements in operational efficiency, puts Marqeta on a firm path towards sustainable growth and profitability. Sure, the concentration risk with $SQ remains a concern, but if we look closely, the growth of Marqeta's business, excluding Block and Klarna, has outpaced the company's overall growth. This highlights Marqeta's growing market penetration and strength of its business model. Marqeta's strong cash reserves and absence of long-term debt put it in an excellent position to manage any potential disruptions in these relationships. Marqeta is perfectly poised to capitalize on the rapid spread of digital banking, buy-now-pay-later (BNPL), cryptocurrency, and card issuance. The unique combination of its strategic focus, operational efficiency, innovative solutions, and strong financial performance make it a compelling candidate for your portfolio. The market's shortsightedness is often our gain as investors and it's crucial to spot opportunities where others see hurdles, and Marqeta is one such opportunity

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