Oh, my goodness backed holdings is going to the moon. Take a look at this folks, ticker symbol. Bkkt is not only up 234 today, but it's up another 74 in after hours now trading over 52 dollars per share. But folks we need to talk.

What is this company? Why is it up? What does it do? That's special and how does it compare to some of its competitors, and can we actually value this company? Is it a good investment? Well, these are things that we're going to talk about in this video right after i mention that this friday there is a coupon code expiring for the programs on building your wealth linked down below. There are five, one is stocks and psychology of money, the others are for real estate. Investing do yourself, property management, rental, renovations, being a real estate agent and selling more deals and making youtube videos. So if you want to make more money and build your wealth check out the programs linked down below use that coupon code diamond hands before friday, because the price does go up every time, a coupon expires.

Okay, folks, let's get into why backed is going to the moon. First, we've got to understand that a lot of payment processors are paying specific attention to cryptocurrencies the vp of blockchain products, for example at mastercard, called the trend in cryptocurrency adoption, unmistakable and so early in february, mastercard announced that it was planning to support cryptocurrencies directly on Its network at some point this year. Well, rather than create their own system, they decided to partner with bkkt, backed holdings, to accept cryptocurrency payments and give merchants the opportunity to be paid in cryptocurrencies. That way, mastercard can continue to transact, but when it comes to converting digital currencies, bkkt could do that for mastercard.

I'll give you some examples in a moment. So, if you're a little confused there, don't worry we'll go through some examples in just a moment now for less than a well for a less than two billion dollar company that is backed holdings to partner with a 356 billion dollar company mastercard. This is a really big deal, but it wasn't just mastercard who partnered with backed holdings or who announced their partnership. Today it was another company as well.

A 70 plus billion dollar company called phi serve, which is one of the largest point of sale, payment, processors in the world, serving banks, credit unions, retail stores and more and today they also announced or released the announcement that they are partnering with backed holdings to provide Fi serve with the opportunity to also accept payments and cryptocurrencies and give merchants the ability to receive it. I kind of picture this like when you're in europe and you've got to you know you stick in your american credit card and then a little prop comes up and says: do you want to pay in euros or do you want to pay in dollars? This might just say bitcoin or dollars, or save default right anyway. These partnerships are all, in addition to partnerships that backed holdings already has backed holdings, for example, partnered with google to allow backed holdings visa debit card to pay with bitcoin at merchants. Accepting google pay.

They also partnered with finastra, to enable crypto trading for community banks and unions, because this is something that be backed holdings does. Is they custody, cryptocurrency trading? So basically, if you go on their back, the holdings app you can buy cryptocurrency. You could send it to your friends and family, and, while you do that backed holdings takes custody of the tokens for you and provides that sort of centralized security. Obviously, this is different from having your own currency key, which a lot of crypto enthusiasts say not my key, not my coin, and you can't then stake or lend out your cryptocurrency, but they make it easy for you to buy and sell much like a lot of Other companies already also do think weeble think robinhood, paypal or square there's a lot of competition in this market, but backed holdings is kind of the infrastructure that makes this a reality for other companies to implement on their website if they want.

So let's say: if i wanted to start a startup tomorrow and go you know what i want people to be able to trade cryptocurrency on the meet kevin app. Well, i could call backed holdings and they could set that up for me and then i could brand everything as or sort of like white label. Everything on my own thing, if i wanted to right uh, but obviously it's a lot more involved than just that licensing. Can you name it we're not even going to go down that rabbit hole, but here's the thing: the company backed holdings, it's worth noting a little history here, it's a spin-off of the intercontinental exchange.

This is a company that owns a ton of exchanges worldwide, get a massive reputation and they're really well connected. This is a company that owns the new york stock exchange, which is crazy, but anyway this company announced it was going public via spac merger. In january they went public on october 18th and they actually fell in price after they, after the merger to as low as eight dollars a share and, of course, now they've exploded on news of this of these announcements and partnerships. Now the stock's trading for over 50 dollars per share, which is pretty incredible but wait a minute.

Is it worth it well to understand? If it's worth it, it's helpful to understand the app. I always like to say: if i'm going to invest in something i've got to know what the product is, so i went ahead and transferred over the maximum amount of money. It would let me transfer over. This is 999 and i was able to transfer this over.

For my checking account after linking my bank account and i'm not sponsored by backed holdings, i don't own any shares of backed holdings, so i just want to be very transparent here. I want to give impartial review and, as i was kind of exploring this, i realized. Okay, there are a few different things you can do. You could buy gift cards on this platform here, and so they have a lot of merchant uh partnerships here and one of the goals that they're trying to do is enable you to use cryptocurrencies to buy gift cards.

They also want you to be able to add your rewards programs so that way, rather than having your air miles just sit around as airline points, you could actually turn that into cryptocurrency. I haven't exactly gone down that rabbit hole yet and of course, you could buy crypto. So, for example, if i wanted to buy bitcoin right now, 999 dollars of which uh oh apparently, i have an insufficient balance, even though i i thought i had 999 dollars uh. Let's try 950.

uh yep okay. Well, i guess i can't buy it yet. Maybe the funds still have to settle. Oh yeah look available cash zero.

Even though the portfolio uh, oh yeah, there you go available. Cash may be lower. While new deposits are processing. Okay, got it uh anyway, so you could should be able to buy cryptocurrency on here.

You can also get a backed uh debit card. It looks like where you can add your digital wallets, and that way you can kind of pay through these. But what i thought was interesting here is: this is actually through a partnership with visa, but visa doesn't actually make these cards instead. Marquita makes these card cards, which is another company, and this just gets so complicated in the layers, but banks doing the transactions and changing usd to cryptocurrency and back backed.

Maybe that's why they're called backed back then partners with visa as potentially or mastercard as the payment processor for fiat and marquita ticker symbol. Mq is a company that could actually create these cards to power, cryptocurrency spending and rewards, and they have done so for companies like coinbase fold, shake pay and, of course backed now. We also believe that a firm uses marquita for uh the affirm card, but anyway, that's that's sort of just a side note on a side, fintech company here, but anyway, okay cool, so so this gives you a little bit of an idea here about uh this. Now one thing that i did think was cool is, i should be able to send uh, send crypto to individuals and uh.

Apparently it's not available now, probably because i have no money uh, but uh. It does look like when when yeah here you go. If i want to send cryptocurrency to someone or request money from someone i could do so and they could just look me up by my username here meet kevin. So if you want to send me bitcoin meet kevin on the back tap.

Okay, i won't send it back, i'm going to keep it and i'm going to spend it anyway. So now back does custody or crypto. Something uh unique that seems to be here on opportunity is, is again converting uh points from rewards programs to from cash to things like bitcoin uh, or at least i thought it was unique. But then i did a little bit more research and i found that crypto.com does a lot of similar things, and so i thought this was really interesting, so crypto.com i haven't transferred money over to crypto.com uh, i'm also not sponsored by crypto.com, but interesting.

Look at this get your crypto.com visa card now and enjoy up to eight percent back uh. You can track different coins. You can buy coins here. You could get different cards a lot of the things.

Look at that crypto rewards. You can sort of pick different cards here. A lot of the things uh that uh backed does it looks like crypto.com also does, in fact, if you jump over to crypto.com and you type in crypto pay, i thought this was really interesting or just type into google. Crypto pay crypto.com actually has a crypto pay platform where they handle the transaction processing for you.

So this is really a competitor here. Right. Look at that pay with crypto earn rewards instant settlements with zero gas fees, buy collectible nfts uh they by the way crypto.com. I'm not officially sponsored by them, but when you sign up with them, you can get an affiliate link.

Anybody can do this if you wanted to sign up for crypto.com, go to medkevin.com crypto met kevin.com crypto and you could get up to 25 for free. I just realized that, because they have the little tag, that's like get 25 for free. I figure. If you're going to sign up, you may as well get 25 for free.

I get 25 for free as well, i'm not officially sponsored by them. I just quickly made an account, and i saw that i'm like okay, amazing i'll put that link down below. I am, however, officially sponsored by block fi and see this is another competitor, not to kind of uh get a little confusing here, but block 5 is another company that also offers you can see the competition here, a bitcoin credit card which, if you want this and You want to get up to 250 for free when you transfer money go to med, kevin.com bf. This is what i am officially sponsored by, but anyway uh and i also invest in this company, but anyway, uh.

Here's just another example where blockfy uses the uh uses visa for for their payment transactions when it's just cash right, but somebody's, obviously processing uh, the crypto transfers, and this is where crypto.com, i'm not sure if they work with blockfire, if blockfight does their own settlements. But regarding crypto.com, this is clearly a competitor to back.com. Now crypto.com is not public. It's worth noting that so really, if you wanted to get into a fintech that does this backed, might be your only option for doing this right now, which i think is one of the reasons we're seeing such enthusiasm for back.com.

However, we don't really have other good valuation comparables, because the other companies just aren't public right, i mean marquita is a firm's public, but these companies are kind of separated. Other companies that might be comparable would be. Companies like square now square is really interesting, because square also accepts payments in crypto and square also custodies, your cryptocurrency, but square actually secured a patent that allows them to settle their own payments and operate their own blockchain for recording transactions. So you've got this sort of space race.

Right now is what this feels like, where all the different companies are trying to find their fit on one hand, you've got square trying to do everything. In fact, let's just draw this down really quick, so we could see how these, like bubbles all fit together. Okay, i think that's gon na be the easiest thing to do here. So you've got over here on its own.

You've got square trying to do everything themselves from payment processing to uh its own blockchain blockchain ledger to custodying they're, trying to do everything themselves and square for what it's worth. They're they're, not exactly a cheap stock. Okay square has a valuation of 121 billion dollars. Backed is probably about a 10 billion dollar valuation company right now, so it's very, very, very small compared to something like square, then you have paypal which uh so far does custody, uh, crypto and lets you buy and sell crypto, but i don't believe they're actually clearing Transactions themselves, yet this would be very similar to what robin hood is doing or what weibull is doing.

Where or like you know, basically, where they let you buy and sell cryptocurrencies or send it peer-to-peer, which you can do with paypal. You could send peer-to-peer, but not on robinhood or evil you'd have to sell and and then transfer right, uh, but uh and even venmo's. Doing this now square seems to be doing. Everything together, which is kind of interesting visa, is clearly in this game.

Uh visa is uh is, is all over. This and visa has obviously partnered with multiple different companies, including partnering, with backed, but also partnering, with the competitor crypto.com, which i found is very interesting. Then you have mastercard, which is partnering with uh, backed but also partnering, for the cards with companies like mq, so you could really see mq there we go. This is you've, got this giant mess of different companies competing in the same space and they're all trying to get uh their hands in this cookie jar.

Oh right and remember: we've also got phi serve trying to get in over here as well. Uh with the bkkt partnership and google, with that bkt partnership right, so you've got a lot of folks competing to get this cryptocurrency market share for transaction volume, because every time there's a transaction there's money, that's exchanged right and people like money. So this is worth noting. Now this is clearly a race here.

Baxter does a lot of things like we mentioned gift cards point transfers. They even do derivatives for futures trading for institutional investors they're trying to do a lot of different things now. What's also interesting about bach, though, is their investor presentation, and this i don't know how exciting this is, and this is where i start questioning valuation a little bit okay, so they received 482 million dollars in cash through this spac merger that they did, which is great. It's a great way for these.

These blank check companies to to get money and to make money. I appreciate that uh because you need money to make money right. It takes money to make money, but if they received what did i say - 482 million dollars in cash. I'm a little bit concerned about spending because take a look at this in 2021, we're expecting out of the 458 million we're expecting to spend 259 million and then another 316 million in 2022, which means at some point soon.

This company is going to have to raise money, which is fine. You can raise money, but just be aware: when a company raises money, usually the stock price falls now, in addition to that, and that's not a big deal, sometimes that could be very temporary. After all, the company's getting the cash to continue to grow, this is super normal, but the other thing that i thought was kind of you know that's a little bit more normal, but something else that i thought was really weird. I did not like this so under the projections which this stuff isn't really regulated by the sec.

These projections could be anything they pull out of thin air and they're, not well regulated at all. The sec has explained that they're very frustrated about these investor prospectuses. So you have to be very careful about this, but right now this company makes virtually no money. What's fascinating, though, is look at this because this was put together at the beginning of 2021, at the beginning of 2021, this company estimated that they would have somewhere around 889 million dollars of revenue.

But if you read the fine print it's a little bit concerning look at the fine print right here: crypto buy and sell 849 million, so the vast majority of that has to do with crypto buy and sell 849 divided by 889 works out to 95.5. So 95.5 of the revenue they're claiming here is from crypto buy and sell, but what's actually interesting is they don't show you all of the expenses they just kind of lump them all together and notice. This little two footnote they put right here. If you go to two this, actually this number right here, this 849 million dollars get.

This folks includes the asset value of cryptocurrency. What so? In other words, if you did a transaction of uh of of one bitcoin they're, basically saying oh, we got fifty thousand dollars of bitcoin revenue, but our fee was a hundred dollars, so we got uh, fifty thousand dollars of revenue and forty 49 900 of dollars. Of that was an expense, so what they're really doing here is they're using this built-in crypto valuation to try to show that their total revenue is going to grow these massive amounts and that you're going to get this insane revenue growth at this company when the reality Is what we should probably be paying more attention to? Is this transaction line up here which don't get me wrong? This transactional line is growing. That's a very nice growth, but it's nowhere near the bolded numbers.

Look how they bowled the big number, which is total fugazi magic anyway, like that to me, is a red flag. Now, again, i don't invest in the company. I want this to go to the moon for people, because i want people to make money, but there are some red flags here. You've got real competition, we're running on news that we don't even know is going to be profitable.

Yet now we expect it to be profitable. The momentum is in the right direction, but let's try to understand a little bit how a transaction like this might actually work. So i put this together really quick just to give you a quick overview now this is going to look overwhelming for a moment, but just go with me. Follow this along for a moment all right, let's say now: you're going to pay for a hot dog, okay, you're, going to pay for a hot dog.

We're highlighting this in green you've got three options: you could pay in cash, you could pay in bitcoin or you could pay in bitcoin, but the merchant wants cash, not bitcoin, right. Okay, let's start with the first one, if you pay in cash with swiping your mastercard card, mastercard will process the transaction, mastercard gets the fees, and i'm assuming this entire. Drawing here is my assumption. My assumption is, the merchant gets the cash and only mastercard makes money back, does not make money here, that's fine! But what? If you click the button, i want to pay in bitcoin.

Well, if you pay in bitcoin and the merchant wants to receive bitcoin, then my expectation is mastercard would route the transaction to bkkt. Bkkt would make money converting that bitcoin to cash uh and then potentially uh or or transacting that cash over to bitcoin. So that way the merchant gets uh. So that way the merchant gets uh bitcoin.

This makes sense. So if you pay in bitcoin back is going to make money here, but what, if you pay in bitcoin and the merchant actually wants cash? Well, my opinion: there are two possibilities here if you click pay in bitcoin, but the merchant wants cash and you're paying your credit card bill in cash, which you usually are going to pay your balance and cash with most credit cards that offer like bitcoin rewards or Whatever this could change, but in theory mastercard, wouldn't have to use backed right. They could just pass this on and go okay sure you want to pay in bitcoin make you feel like you're, paying a bitcoin but then really just pay in cash and the merchant gets cash, which is what the merchant wants. It's really just creating the option.

Now, if the merchant wants, i see the other option here, of course, would be pay in bitcoin backed converts bitcoin from the user. But then you have to convert it back to cash, so you're, twice, converting it paying twice the fees, so that doesn't make much sense to me. So really the the place where backed would make money is really only in this scenario right here in the middle. That's the user pays in bitcoin and the merchant wants to receive money in bitcoin, and i expect that this marriage is going to take multiple years to actually happen.

Uh. That merchants are willing to take bitcoin that you go to and regularly spend money at and the user wants to pay in bitcoin that's going to take a while, as my expectation now i do think there is profit in that when that starts happening. But personally, i think the valuation here is a little bit stretched a little bit overblown and for me, let's just say it's not something that i'm going to invest in. Am i happy for the cryptocurrency movement 110? Do i want the stock to go to the moon? Absolutely am i shorting this stock? No, do i own the stock? No.

Am i going to fomo buy this stock? No okay! But folks, if you, like my perspectives, check out the programs linked down below on building your wealth share. This video and we'll see you in the next video thanks so much.