STRONG BUY Highlights
• Australia based Banxa is a Payment Service Provider/PSP company, that allows users to convert fiat-to-crypto and vice versa.
• The company is the first and only PSP to go public to date. Shares are up 60% since our introductory note on January 7, 2021.
• Banxa serves both B2B and B2C markets, with its flagship B2B solutions reaching 30M+ customers across 130+ countries through multiple partners. Partners include top cryptocurrency exchanges such as Binance, Huobi, and OKEx.
• Banxa’s Total Transaction Value (TTV) in H1-FY2021 (ended December 31, 2020) was $195M, up 780% YoY. TTV in the first two months of Q3 was $125M, surpassing full Q2-FY2021’s $111M. Q2 revenue was A$4.5M, up 228% YoY.
• Bitcoin prices hit record highs this year. The total MCAP of cryptos still accounts for less than 1% of fiat. The recent increase in investor appetite for cryptos has resulted in a significant increase in trading volume. For example, Binance’s trading volume on March 11, 2021, was US$25B vs US$6B on January 1, 2021.
• We believe the popularity of cryptos is driven by their fast execution of transactions, the ability to bypass conventional intermediary fees, and in some cases, its use as a potential hedge against inflation (i.e. Bitcoin’s limited supply). Although the sector is highly competitive, we believe Banxa’s affiliation with the top crypto exchanges, along with its early mover advantage, sets the company up for growth going forward.