Newly public Coinbase (NASDAQ: COIN), the largest regulated cryptocurrency exchange operator, is already doing the trick as an innovative and disruptive company. Hence his residence in the ETF ARK Fintech Innovation (NYSEARCA: ARKF).
Like innovative companies, Coinbase offers new ways to innovate, which could be a plus for ARKF investors. Last week, the crypto exchange giant unveiled a new feature that allows customers to directly deposit their paychecks into a Coinbase account and convert a percentage of their pay into crypto. Try to do it in a regular bank.
“Users will choose the percentage of their paychecks to deposit with Coinbase, then the currencies to convert to: USD or one of the more than 100 cryptocurrencies on its platform,” according to ARK Invest research .
Perhaps in an effort to better compete with traditional banks and attract more direct deposit activity, Coinbase will not charge customers a conversion fee, but will generate income from the spreads when those customers buy and sell. digital assets.
The Coinbase crypto paycheck program is another step in the evolution of digital wallets, a theme ARKF is strongly attached to, perhaps more than any other exchange-traded fund.
“Digital wallets typically focus on the desirability of user payroll to increase recurring fund flows, user retention, and user engagement with other revenue-generating services. Recently, for example, Square emphasized that increasing recurring Cash App entries was a top priority, and those deposits were the main reason its gross margin increased. Likewise, the Chinese government has been working with companies to integrate salary deposits into its Central Bank Digital Currency (CBDC) pilot project, in the hope of integrating the digital yuan into the daily lives of users, ” adds ARK Invest.
PayPal’s Venmo (NASDAQ: PYPL) is another example of a top contender in the digital wallet world. In order, Square (NYSE: SQ), Coinbase and PayPal combine for around 21% of the weight of the actively managed ARKF.
As far as Coinbase is concerned, this could be an avenue to generate long-term income with its direct deposit plan, and it could benefit ARKF patient investors.
“ARK believes that with payroll direct deposit, Coinbase will increase the adoption and monetization of its trading, yield generation, peer-to-peer and commerce products. In addition, by facilitating inbound flows into crypto, Coinbase is also likely to increase user activity across the crypto ecosystem, ”notes the ARKF issuer.
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The opinions and forecasts expressed herein are solely those of Tom Lydon and may not come to fruition. The information on this site should not be used or interpreted as an offer to sell, a solicitation of an offer to buy or a recommendation for any product.