Well, the Fed finally stopped pretending and dropped “transitory” from their inflation talking points.
But don’t take that as guidance. The path of aggregate consumer prices is anyone’s guess. There are as many deflationary pressures floating around the world today as inflationary.
The Fed could hike rates, crush growth, and trigger defaults. And just like dollars get borrowed into existence, less debt through defaults takes them out of the system.
And that spells deflation.
The only thing you can be sure of is that when forces build in opposition of each other, chaos comes next.
And the dollar is not immune to monetary chaos.
But we’re not prisoners in the dollar-system. Neither are businesses.
You don’t have to save in dollars. And businesses don’t have to get paid in them.
They can conduct business any way they choose, including crypto.
And today I want to tell you about two companies providing businesses an onramp to the emerging crypto universe.
A Bank Opening the Gate to Crypto
The first company is Silvergate Capital Corporation (NYSE: SI).
I first recommended them towards the end of October. And after an early run up, they are now back to the $140 range.
SIlvergate is a bank holding company, providing cryptocurrency banking services to companies. They lend in crypto. They process payments in crypto. And basically, do everything a commercial banker does for a business, except in crypto.
Revenue over the last twelve months came in at just over $150 million. And expenses are in line with what you would typically see in traditional banks. At current expense levels and a 35% annual growth in revenue, the stock is fairly priced.
But the opportunity with Silvergate is the built-in call option on crypto acceptance and the leverage that a bank balance sheet provides.
Should businesses flock to crypto – and they will when consumers decide that’s how they want to pay – revenue growth could easily double. Assuming 60% revenue growth, the stock is worth over $261 per share. Take that to 70%, and $400 comes easily within range.
So, with the stock giving us another chance, consider buying SI.
Now, the next company I want to tell you about is helping companies accept payment in crypto in the first place.
Crypto Middle Man
Greenbox POS (NASDAQ: GBOX) sells crypto-friendly point-of-sale solutions to businesses.
With it, companies can deal with customers and vendors in Bitcoin, Ethereum, and a stable USD coin.
Revenue is running at about $32 million per year (based on last quarter’s performance), and with only $50 million in capital plowed into the business, investors can expect an exceptionally high return on capital from this intellectual property heavy, capital light business.
GBOX trades at less than $5 currently. But should crypto make the turn from speculative plaything to real money (and I believe firmly that it will), this stock could go to the moon.
Yet, we don’t have to wait for that to happen. Businesses are already flocking to companies like Greenbox to implement crypto payment systems. And even should revenue growth back off from its current 200%-plus pace, $25 per share comes within range.
So, consider buying GBOX along with SI because, whatever direction inflation takes next, businesses, workers, and consumers alike may all soon be looking for the exits.
P.S. Telegram is the place I’m sharing exclusive content, including a live Deep Dive session where I examine Greenbox’s financials in full detail.