Author: therawinformant

  • Lending seized up in the second quarter: Morning Brief

    Lending seized up in the second quarter: Morning BriefTop news and what to watch in the markets on Wednesday, August 5, 2020.

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  • Brent Oil Tops $45 a Barrel With U.S. Crude Stockpiles Easing

    Brent Oil Tops $45 a Barrel With U.S. Crude Stockpiles Easing(Bloomberg) — Oil climbed to a five-month high in London, topping $45 a barrel after U.S. industry data showed a decline in the nation’s stockpiles.Brent futures gained for a fourth day, rising as much as 1.7% to the highest price since March 6. The American Petroleum Institute reported a 8.59 million-barrel drop in crude inventories last week, according to people familiar with the figures. Meanwhile, European equities and U.S. futures advanced on signs American lawmakers are making progress on an economic aid package.Oil has struggled to maintain its momentum after rallying from a plunge below zero in April as rising coronavirus infections raise concerns about a sustained recovery in consumption. OPEC+ is set to test the market by returning some supply this month after historic output curbs, while Saudi Aramco is poised to delay the release of its official selling prices for September as producers face pressure to reduce the cost of their crude with demand ebbing.“Oil prices are rising, pricing in what looks like a sizable decline in U.S. crude inventories,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy.A Bloomberg survey shows U.S. crude stockpiles probably fell by 3.35 million barrels last week. That would be the third weekly decline in four weeks if confirmed by official data from the Energy Information Administration later on Wednesday.The forecast drop follows a sharp reduction in U.S. crude production since March. And on Tuesday, American shale drillers signaled the end of output growth, with Diamondback Energy Inc.’s chief executive officer saying there are currently no market signals that such growth is needed.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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  • Apple, Amazon and Google Are All Pretty Bulletproof

    Apple, Amazon and Google Are All Pretty Bulletproof(Bloomberg Opinion) — Europe has the motivation, but not the means, to break up Big Tech. For the U.S., the inverse is true. That’s bad news for anyone hoping for a full regulatory reckoning with Silicon Valley’s and Seattle’s giants over their monopolistic tendencies.Washington lawmakers see their job as protecting the consumer first and foremost, while Brussels wants to make sure other companies are allowed to compete with the incumbents. Sadly for Europe, the Americans have all the power but their approach is unlikely to produce radical change (as my Opinion colleague Tara Lachapelle wrote this week).That isn’t to say the European Union is wasting its time in leading the charge against Big Tech. Congress’s grilling last week of the chief executives of Apple Inc., Amazon.com Inc., Google parent Alphabet Inc. and Facebook Inc. showed that the “Brussels Effect” is in full force. The EU plays an outsized role when it comes to regulation because other regions — even the Americans — tend to follow its lead. Up to a point, at least.As U.S. lawmakers made the case against the West Coast giants, time and again their arguments echoed efforts already well underway in Europe. When the Democratic Representative David Cicilline tackled the way Google displays news snippets in search results without reimbursing the publishers, he evoked new copyright laws proposed by the EU last year.For two years Brussels has been looking at whether Amazon uses its marketplace data to compete unfairly with the sellers on its website; that’s now a hot topic on Capitol Hill too. The market power of Apple’s App Store and of virtual assistants such as Siri and Alexa, both of which are the subject of new EU investigations, were also on Congress’s agenda.QuicktakeHow the ‘Brussels Effect’ Helps the EU Rule the WorldWhen people ask Margrethe Vestager and other European trustbusters what power they really have to moderate the behavior of trillion dollar U.S. companies, this is often their answer: When Brussels uncovers bad corporate behavior, it lays out a road map for Washington D.C. to follow.Tackling companies with combined annual revenue of $782 billion, more than the gross domestic product of Switzerland, is a huge challenge, meaning competition authorities benefit from the work that’s already been done elsewhere. Even the British Competition and Markets Authority’s study of the digital-advertising market got a shout out from Rep. Pramila Jayapal, who cited the agency’s findings on Google’s dominant market share.The European Commission does have the legal authority to try to break companies up, but no one thinks it would ever try this on a U.S. company. The political blowback would be too severe. The Americans could themselves seek breakups, and would have the power to do so, but their antitrust regime has different priorities. While the problems — and the levels of exasperation at the cavalier behavior of the companies — might be the same, the types of punishment that lawmakers have in mind are different, according to Nicolas Petit, the joint chair in competition law at the European University Institute.That’s because American antitrust law focuses on the interests of the consumer — primarily around pricing — while Europe considers the broader market dynamics and effect on competition. While Vestager probably wants to foster the creation of a company that could counterbalance Google and Facebook’s might in search and social media, her U.S. peers only worry if the impact of their dominance is detrimental to consumers.That narrower American focus limits the likelihood of far-reaching action, says Tommaso Valletti, the head of Imperial College London’s Department of Economics and Public Policy, and a former chief competition economist at the European Commission. “The U.S. has, de facto, abdicated any enforcement for 20 years in this area,” he told me.In her submission to the House of Representatives’ antitrust subcommittee, Vestager called for “common” policy responses, according to a document obtained by the website Euractiv. It’s an admirable goal and should be the logical conclusion of investigations tackling many of the same topics. It’s also a pipe dream.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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  • Advance NanoTek share price on watch after mixed full year result and outlook

    Disappointing results

    The Advance NanoTek Ltd (ASX: ANO) share price could come under pressure on Thursday following the after-hours release of its FY 2020 results.

    How did Advance NanoTek perform in FY 2020?

    For the 12 months ended 30 June 2020, the sunscreen-focused advanced materials company delivered revenue from ordinary activities of $17.97 million. This was a 46% increase on the prior corresponding period and in line with its May guidance for revenue of $18 million.

    One metric that did fall short of its guidance was its profit before tax. Advance NanoTek reported a 121% increase in profit before tax to $7.46 million. This compares to the guidance of $8.4 million for FY 2020 it gave on 11 May. No explanation was given in relation to why the company hit its sales target but fell short of its profit before tax guidance.

    On the bottom line, the company reported a net profit after tax of $5.3 million, which was down 44.7% on the prior corresponding period. Though, it is worth noting that FY 2019’s profit after tax was positively impacted by its decision to write back a tax benefit of $6.25 million.

    FY 2021 outlook.

    The increasing demand for hand sanitiser globally during the pandemic looks set to impact its sales in FY 2021. Management notes that this increase is limiting the production capacity of manufacturers for products such as sunscreens.

    The company is also anticipating a gap in sales over the next three months as distributors sell down inventory. While management expects the first half to be an improvement on the first half of FY 2019, it looks likely to be down on the corresponding period in FY 2020.

    Despite this, Advance NanoTek has been ramping up production and building up its inventory. Management commented: “The Board is very satisfied with this new strategy because ANO has significantly shortened delivery times-frames to five days and reduced the cashflow burden on our distributors of having to hold significant inventory in their warehouses.”

    5 stocks under $5

    We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.

    And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $5 a share!

    *Extreme Opportunities returns as of June 5th 2020

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    James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Advance NanoTek Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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  • Why the Pinnacle Investment share price has rocketed 40% since 1 July

    Investor riding a rocket blasting off over a share price chart

    Investment management firm Pinnacle Investment Management Group Ltd (ASX: PNI) saw its share price rocket 28.8% higher in July alone, and it’s now up by 40.3% since the start of last month.

    The Pinnacle Investment share price hit a monthly high of $5.19 on 30 July, before following the broader market down to close the month at $5.01 per share. That earns it a spot among the top performers on the All Ordinaries Index (ASX: XAO) last month.

    Year-to-date, the Pinnacle Investment share price has gained 18.02%, after falling 1.96% in today’s trade. Over that same time the All Ords — down 0.5% today — lost 9.9%.

    Like most stocks, Pinnacle fell sharply during the big pandemic-fuelled equity selloff in late February into mid-March. Pinnacle shares bottomed on 25 March at $2.51 per share. Since then, the Pinnacle Investment share price has gained a whopping 119%.

    What does Pinnacle Investment Management do?

    Pinnacle is an Australian-based investment management firm with multiple affiliates. The company works to establish and support a wide range of investment management firms. It provides investment managers with distribution, fund infrastructure and support services. Its affiliated managers operate autonomously.

    As at 31 May 2020, Pinnacle’s 15 affiliates managed a combined $57.0 billion in assets covering a range of asset classes.

    Why did the Pinnacle Investment share price shoot higher?

    In an announcement on 6 July, Pinnacle reported that 5 its affiliates earned approximately $25.8 million in performance fees for the 2020 financial year. At the time, Pinnacle forecast the performance fees would increase its net profit after tax (NPAT) by $6.7 million. Pinnacle’s share price surged 10.4% the day following its announcement.

    Pinnacle also is a likely beneficiary of a wider shift away from traditional banks as investors seek to take more control of their finances. This trend gained traction after the Royal Commission into banking and financial services unearthed a range of unethical practices amongst some of Australia’s best known banks and financial institutions.

    Annual shareholder report

    Pinnacle released its annual shareholder report yesterday. Coming in at $32.2 million, the company’s NPAT attributable to shareholders is up 5.6% from the $30.5 million achieved in the 2019 financial year (FY19).

    Earnings per share (EPS) attributable to shareholders also increased year-over-year to 17.9 cents. That’s up 4.7% from 17.1 cents in FY19.

    Pinnacle’s fully franked final dividend per share of 8.5 cents saw total dividends reach 15.4 cents, the same total dividend payout as the previous year.

    The Pinnacle Investment share price is currently sitting at $5.50 per share with a market capitalisation of $1.02 billion.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    *Returns as of June 30th

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    Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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  • Why I would add Coles and this ASX share to my retirement portfolio

    letter blocks spelling out the word retire

    If you’re young and are just starting out with investing, you might focus on growth shares like Zip Co Ltd (ASX: Z1P) that offer potentially strong returns.

    This is because, with time on your side, you can afford to invest in higher risk shares as you have the opportunity to recover your losses further down the line if things don’t go to plan.

    But when you are approaching retirement, I feel your focus should shift to lower risk options that offer income and capital preservation.

    With that in mind, I have picked out two ASX shares which I think would be great options for a retirement portfolio:

    Coles Group Ltd (ASX: COL)

    I believe this supermarket giant would be a fantastic option for a retirement portfolio. This is due largely to its solid long term outlook and defensive qualities. The latter has been on display for all to see this year during the pandemic. Coles looks set to deliver a very strong profit result later this month, which should put it in a position to increase its dividend nicely. I expect more of the same in FY 2021, especially given recent lockdowns, and for its growth to continue over the next decade and beyond. Another positive is its favourable dividend policy which sees it pay out between 80% and 90% of its earnings to shareholders. Based on the current Coles share price, I estimate that this will mean a 3.4% fully franked dividend yield in FY 2021.

    Rural Funds Group (ASX: RFF)

    Another top option for a retirement portfolio could be this agriculture-focused property group. This is because of the quality of its assets and its positive long-term distribution outlook. Thanks to its long-term tenancy agreements and periodic rent increases, I believe Rural Funds will be able to grow its distribution at a consistently solid rate long into the future. An added bonus is that it pays its distribution in quarterly instalments, providing investors with a regular source of income. In FY 2021 Rural Funds intends to pay an 11.28 cents per share distribution. Based on the latest Rural Funds share price, this equates to a 5.4% yield.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    *Returns as of June 30th

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    James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia owns shares of COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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  • Tencent in Talks to Create $10 Billion Streaming Giant

    Tencent in Talks to Create $10 Billion Streaming Giant(Bloomberg) — Tencent Holdings Ltd. is driving discussions to merge China’s biggest game-streaming platforms Huya Inc. and DouYu International Holdings Ltd., people familiar with the matter said, in a deal that would allow it to dominate the $3.4 billion arena.The Chinese social media titan — which owns a 37% stake in Huya and 38% of DouYu — has been discussing such a merger with the duo over the past few months, although details have yet to be finalized, said the people, who asked not to be identified because discussions are private. Tencent is seeking to become the largest shareholder in the combined entity, one person said.A deal would create an online giant with more than 300 million users and a combined market value of $10 billion, cementing Tencent’s lead in Chinese games and social media. Faced with rising competition for advertisers from ByteDance Ltd. and its rapidly growing stable of apps, the WeChat operator would then run a highly profitable service akin to Amazon.com Inc.’s Twitch. Huya and DouYu would keep their respective platforms and branding while working more closely with Tencent’s own esports site eGame, said the people.“As the major shareholder of both platforms, Tencent would benefit because a merger would remove unnecessary competition between them,” Bloomberg Intelligence analyst Vey-Sern Ling said. “The enlarged scale can also help to drive cost synergies and fend off emerging competitors.”Tencent’s shares were up 1.5% in afternoon trade. Tencent and DouYu representatives declined to comment, while Huya spokespeople didn’t respond to requests for comment.Tencent’s shoring up its home-market position against the backdrop of a Trump administration increasingly hostile toward Chinese tech companies. WeChat has a limited U.S. presence and Trovo Live, a mobile-focused game-streaming service for American consumers, is only in its initial stages.China’s game-streaming market is estimated to generate 23.6 billion yuan ($3.4 billion) in revenue this year, according to iResearch. The country’s streaming networks live and die by the popularity of star players and the virtual tips and gifts that fans buy for them, leading to intense bidding wars for the most-recognized names. Companies like Google-backed Chushou TV shuttered their services after failing to secure new money, while NetEase Inc.’s CC Live has found a small niche in broadcasting its in-house titles.Already featuring Tencent’s marquee games like PUBG Mobile and Honor of Kings, Huya and DouYu have established a clear lead as the top two platforms. Nevertheless, revenue growth slowed down for both in recent quarters as users shifted their attention to ByteDance’s Douyin, the Chinese twin to the globally popular TikTok short-video service. A merger would help them lower broadcast and content costs at a time when rival video services like Kuaishou and Bilibili Inc — both also backed by Tencent — intensify their efforts to compete for more gaming content.In April, Tencent bought an additional stake in Huya for about $260 million from Joyy Inc., boosting its voting power in the platform to more than 50%. When asked about the possibility of a merger with Huya, DouYu founder and Chief Executive Officer Chen Shaojie told analysts on a March earnings call: “We believe it’s Tencent’s vision.”(Updates with analyst’s comment from the fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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  • 2 ASX shares that are absurdly cheap right now

    Price up or down

    There are some ASX shares that look absurdly cheap right now in my opinion.

    I’d like to snap up some of them for my portfolio. There are plenty of businesses that seem troubled due to COVID-19 impacts – I wouldn’t want to buy those. It could be like trying to catch a falling knife.

    There are other shares that have good growth potential, but their share prices are too eye-watering for me at the moment. I’m thinking about shares like Kogan.com Ltd (ASX: KGN) and Afterpay Ltd (ASX: APT).

    But I think these ASX shares could be very cheap buys right now:

    Share 1: Vitalharvest Freehold Trust (ASX: VTH)

    Vitalharvest is a real estate investment trust which owns some of the largest aggregations of berry and citrus farms in Australia. Those farms are leased to leading horticultural business Costa Group Holdings Ltd (ASX: CGC).

    From those existing farms it receives a solid fixed rental return as well as variable rent in the form of 25% of the profit generated by those farms. The last 18 months has been quite difficult for Costa (and Vitalharvest’s) earnings, but I think we have passed the worst point.

    I think increased earnings and distributions from improved variable rent could be a boost for shareholders and the Vitalharvest share price.

    Another boost could come from the new manager Primewest Group Ltd (ASX: PWG). Primewest plans to look for new acquisition opportunities for the ASX share in both Australia and New Zealand.

    It’s going to look for farms, processing and manufacturing facilities for food, food and beverage packaging facilities and storage facilities relating to food. I think this wider investment scope, and a regular acquisition plan, will make more investors take notice of Vitalharvest.

    It had a net asset value (NAV) of $0.95 per unit at 31 December 2019. At the current Vitalharvest share price that’s a 19% discount, assuming the NAV hasn’t changed. There’s a chance the NAV has grown since then. Of course, it could also have fallen.

    Using the last 12 months of distributions, it offers a current distribution yield of 6.2%.

    Share 2: NAOS Small Cap Opportunities Company Ltd (ASX: NSC)

    This is a listed investment company (LIC). The job of a LIC is to invest in other shares on behalf of shareholders.

    Some of its current investments include retirement living business Eureka Group Holdings Ltd (ASX: EGH), IT and telecommunications provider Over The Wire Holdings Ltd (ASX: OTW) and IP voice network business MNF Group Ltd (ASX: MNF). These businesses are proving defensive during COVID-19. For example, one of MNF’s customers is Zoom, the video conferencing business, which has seen a large amount of growth.

    This LIC looks for ASX shares with market caps between $100 million and $1 billion. It has a high-conviction portfolio of around ten businesses, meaning it has a large position in each share with an aim of holding for them for the long-term.

    I think this LIC is really cheap because of the discount to its net tangible assets (NTA). At 30 June 2020 it had pre-tax NTA per share of $0.68. At the current NAOS Small Cap Opportunities Company share price it’s trading at a 23.5% discount to the June NTA.

    The LIC has had a tough couple of years, but I think performance will return to a more normal level as the economy recovers from COVID-19. FY20 was a solid year for the Naos LIC, its 2.6% portfolio return (after expenses, before fees) was 8.26% better than the return of the S&P/ASX Small Ordinaries Accumulation Index.

    The ASX share seems to have a floor of a quarterly 1 cent per share dividend, equating to an annual 4 cents per share. This is a grossed-up dividend yield of 11%.

    I think the NTA discount is so large that you can’t go too wrong with this pick, unless there’s another crash later this year due to COVID-19 or the US election.

    Foolish takeaway

    I think both these ASX shares look very cheap and there’s a good chance the discount to their underlying values will close up over time. Even if they don’t rise, shareholders will be rewarded with seemingly large income payments over the next 12 months. At the current prices I’d probably go for Vitalharvest, but I’d be happy to buy both.

    Where to invest $1,000 right now

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

    *Returns as of June 30th

    More reading

    Tristan Harrison owns shares of NAO SMLCAP FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd and Over The Wire Holdings Ltd. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO and MNF Group Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Kogan.com ltd and Over The Wire Holdings Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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  • Square Reports Massive Q2 Earnings Beat, As Bitcoin Revenue Rises 600%

    Square Reports Massive Q2 Earnings Beat, As Bitcoin Revenue Rises 600%Square Inc (NYSE: SQ) beat analyst expectations in its second quarter earnings report Tuesday, as its mobile payment service Cash App netted significant profit, including from Bitcoin.Q2 Earnings: The Jack Dorsey-led company reported an adjusted earnings per share of 18 cents in Q2, down from the 21 cents posted in the similar quarter last year.This signficantly beat Wall Street estimates. Analysts polled by Refinitiv had estimated an average adjusted loss per share of 5 cents, as earlier reported by CNBC.Square's net loss stood at $11.5 million, up 71.6% from last year's $6.7 million. Overall adjusted EBITDA was at $97.9 million, down 7% from 2019 Q2's 105.3 million.Cash App Leads Charge: The company's largest revenue growth came with Cash App, which netted $281 million in gross profit on a total revenue of $1.2 billion.View more earnings on SQRevenue through Bitcoin increased a whopping 600% for the payments app at $875 million. Bitcoin gross profit increased 711% YoY at $17 million.The increase in both revenue and profits stemmed from a rise in customer demand. Square revealed that as of June, the app had 30 million monthly transacting active users.The Cash App offers Bitcoin purchase, commission-free stock trading, and allows customers to send money on a peer-to-peer basis as well as make payments. It competes with Apple Inc's (NASDAQ: AAPL) Apple Pay, Alphabet Inc's (NASDAQ: GOOGL) (NASDAQ: GOOG) Google Pay and PayPal Holding Inc's (NASDAQ: PYPL) Venmo in the space.Dorsey's Personal Interest: Square CEO Jack Dorsey, who also leads Twitter Inc (NYSE: TWTR), has long expressed his support for Bitcoin. In an interview with The Times in 2018, he claimed the apex cryptocurrency has a potential to become the world's sole currency by 2030. Dorsey personally invested in cryptocurrency startup CoinList in 2019.Photo courtesy: Shardayy Photography on FlickrSee more from Benzinga * Apple Buys Mobile Startup Mobeewave For 0M To Enable Contactless Payments: Report * PayPal To Partner With Broker For Cryptocurrency Offerings On Its Platform: Report * Goldman Sachs-Backed Card Issuer Marqeta Gets Ready To Go Public(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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