Billionaire venture investor Chamat Palihapitiya predicts a decline in Visa and MasterCard shares amid the development of decentralized alternatives this year.
"I believe that Visa and MasterCard will lose the most commercially in 2022, as well as traditional payment mechanisms, as well as the entire ecosystem around them—" he said during a recent podcast. "Today's payment systems represent a completely contrived monopoly of two companies, for which there is no reason to exist."
According to the investor, 2022 provides market participants with a unique bargain on the divergence of two directions:
"Take short positions on these companies and on everyone who exists at the expense of two or three percent transaction tax. Take long positions on deeply thought-out crypto projects from the Web3 world that transform the payment infrastructure in a completely decentralized way. If you study the white paper of these crypto projects and systematically collect the big picture, you will be able to hold long positions on them and short positions on Visa and MasterCard. I believe that these companies have reached the maximum in terms of market capitalization."
As a justification for his point of view, Palihapitiya mentioned Amazon's refusal to work with Visa credit cards in the UK due to high fees in November:
"This is a canary in a coal mine, and it is quite large. Amazon wouldn't do something like this if it wasn't a preparation for similar actions around the world. Today, all these companies have no need to use the services of Visa, MasterCard and American Express. It's unnecessary."
The investor himself is betting on countries such as Nigeria, where, according to him, there are major opportunities for innovation. At the same time, he warned against investing in "scam crypto projects that are widespread in large numbers and will fall to zero."