Billionaire Chamath Palihapitiya predicts that altcoin projects will fuel the most profitable spread trade of his life in 2022 as crypto challenges Visa and Mastercard

Billionaire investor Chamath Palihapitiya says the old guard of the traditional payment system is likely to emerge through Blockchain– and decentralized financial technologies (DeFi) is dethroned.
In a new discussion on the all-in podcast, the CEO of the venture capital company Social Capital informed the 134,000 subscribers of the YouTube channel that he wanted to bet against the industry giants Visa and Mastercard in favor of the Web 3.0 pioneers.

Palihapitiya says

“My biggest business losers for 2022 are Visa and Mastercard as well as traditional payment channels and the entire ecosystem around them.

I think this is the year you can get what is probably the most profitable spread trade of my life, which is short positions in these companies and anyone who essentially lives off those two or three percent [transaction] Taxes and well-thought-out Web3 crypto projects that rebuild the payment infrastructure in a completely decentralized way …

If you read the whitepapers of these crypto projects and systematically build a framework, I think you can be long and you can keep Visa / Mastercard short because I think this is their maximum Market capitalization is.”

A spread trade involves buying and selling two related securities at the same time as part of a single unit. Investors seek to benefit from price differences between security rather than from the rise or fall in the value of an individual security.

Palihapitiya calls the decision of the online shopping giant Amazon to stop accepting Visa credit card transactions in the UK as a lead event.

The CEO says

“The canary in the coal mine here is pretty significant.

Most importantly, Amazon just decided earlier this year to close Visa in the UK.

Amazon won’t do anything like that in my opinion unless it’s a test of what they can do around the world. “

Palihapitiya says he is looking to the nations in the developing world to adopt new technology in the next decade.

“Today, all of these small businesses really don’t have to sit on Visa, Mastercard and [American Express] Rails. It is unnecessary.

It will likely be developed in developing countries first, so I think it is a lot more exciting to focus on markets like Nigeria than talking about these dwindling Western European countries. This is where this stuff will happen …

We look back in 10 years and [traditional payment processor] Market caps will be much lower.

Everyone in these traditional infrastructures and rails versus everyone in this new infrastructure and rails will look like a breeze. “

Palihapitiya concludes by discussing the “buy now, pay later” model of the credit card system.

“Buy now, pay later is a tariff arbitrage …

The consumer experience is starting to get used to it: “I don’t have to pay these three credit card companies these exorbitant prices to transact with money I already have or are good for.”

That’s the big idea, and if you translate this into a good project or series of projects in Web3, you won’t need these companies.

I think it’s going to gouge trillions of dollars in market cap. “

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