Trends and predictions for 2021

Also: ⏰ The year behind us 🗓 Predictions for 2021 🕋 Bitcoin - the first true religion of the 21st century 🏚 Buy an apartment for 45 NOK?

⏰ The year behind us

The years in reviews are rolling in at the moment. Forbes are having their Fintech Awards where they crown Jack Dorsey (from Twitter and Square) "Forbes Person Of The Year In Fintech". The reason is that Square has shown that larger, more mature fintech companies can still launch disruptive products, like letting people receive their government stimulus funds electronically through their Cash App. By Norwegian standards, it's not that impressive considering the Norwegian Tax administration managed to create an automatic compensation scheme for the private sector in just three weeks. Still, there is a lot of unbanked in the US, which has been a critical part of Cash apps growth during the pandemic, adding 1 million new users a month for six months.

The fascinating aspect about this is how the Cash app in four years has overtaken PayPal's Venmo as the preferred peer-to-peer payment solution in the US:

The VC-investors in Andreessen Horowitz has written about their 50 top-words within Fintech the last year and explanation for why they are selected. One of them is Neobanks:

Neobanks: "The U.S.-based neobanks that have seen the most traction to date have largely focused on underserved or unbanked consumers, those typically not sought after by big banks, since high servicing costs make low balance accounts unprofitable. So why are neobanks now taking an active interest in prime consumers? The calculus is obvious: They're betting they can lure these profitable customers away from incumbent banks with substantially better bundled perks."

It will be interesting to see how this bet pays off and if some of the Neobanks eventually will be profitable. There is a trust gap among many consumers to go all-in on a challenger bank. Only 45% of UK consumers reported that they believe that neobanks will survive the next 12 months, according to new research from Accenture.

Fintech was non-the-less the industry in Europe that raised the most money of all in 2020, and Sifted has made a list of the ten largest funding-rounds. Klarna was, by no surprise, the one raising the most money with two top-three placements. At the top, we also find well-known companies like Revolut and Tink.

🗓 Predictions for 2021

As sure as we get year in reviews, people are looking ahead at trends and predictions for 2021:

A common thread in the predictions is the uptick in contactless payments and mobile banking. As an extension of this, people are still waiting for automated, personalized financial advice based on their holistic financial situation. Maybe 2021 will be the year? Or perhaps it will be the year where we find out that that is one of the areas that aren't that easy to automate and need a human touch? Maybe 2021 will be the year for financial video consultations?

What is more apparent is that digital currencies are a rising trend. ~ 80% of the world's central banks are working on some form of central bank digital currency, and the Decentralized Finance (DeFi) sector has grown 20-fold in 2020.

🕋 Bitcoin - the first true religion of the 21st century

We've all probably heard the news of Bitcoin reaching new highs for the last weeks, but what is little talked about is that this triggers some excellent reflections and explanations around crypto-currencies that are worth reading. Here are some of our favorites so far this year:

by Joe Weisenthal from Bloomberg.

There's plenty of evidence for it:

It has a prophet. Satoshi, who not only has never been identified but who has apparently departed the world.

Not only is there a prophet, Satoshi was apparently in it for the benefit of all mankind. There's no evidence that Satoshi ever sold a single coin.

Bitcoin's first block was called The Genesis Block.

Bitcoin has a sacred text: The White Paper

[...]

By Tyler Cowen

Crypto assets can be either useful hedges or useful forms of payment — but not both [...] The more utopian scenarios for crypto, whether proponents realize it or not, rely on the notion that crypto remains simultaneously fringe and mainstream. That will be a hard trick to pull off.

By Matt Huang, Paradigm

Since Bitcoin's inception, many intelligent investors have observed that it appears to be a bubble. They are more right than they know. If we define a bubble asset as one that is overvalued relative to intrinsic value, then we can think of all monetary assets as bubble assets.

🏚 Buy an apartment for 45 NOK?

Would you like a luxury home with a large swimming pool and your own gym for 45 NOK? This can be yours thanks to a new phenomenon that is ravaging the real estate market in England. The owner has decided to put the apartment up for sale with the method called "raffle tickets," where interested buyers can buy tickets for the apartment. The goal is to eventually sell so many lots that the income for tickets corresponds to the property's sales value. Read more about it here.

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Marius Hauken, partner Stacc X