Alphabet (GOOGL)’s original business was bringing information into the digital age. It created sophisticated algorithms that helped people quickly sort through the rapidly growing mountain of information on the internet. And boy, did that business take off.
The Google search engine became so widely used that its name has become synonymous with search as in “Google it.”
I think Google’s big breakthrough was when it convinced Apple (AAPL) (with billions of dollars) to pre-load Google’s search bar on all its iPhones. It hasn’t looked back since.
Now, another mobile phone maker — this time Samsung — is about to set the price of another company on fire from pre-loading a link to its service.
Samsung is the second largest maker of mobile phones in the world after Apple: It sold 300 million cellphones last year — which is good enough for a 19% market share.
And is putting a cryptocurrency icon on the default page of its newest phones. I’m talking about Bitcoin (BTC, Rated “A-”).
Samsung’s new 5G enabled smartphones, the S20 series, will be released on March 8. They’ll come with a pre-installed cryptocurrency wallet, called Blockchain Keystone.
Not only will you be able to buy Bitcoin and other cryptocurrencies with a few finger taps, you will be able to securely store the private keys to crypto wallets on your mobile phone.
Samsung wrote an announcement for their new phones, saying:
We created a secure processor dedicated to protecting your PIN, password, pattern and Blockchain Private Key. Combined with the Knox platform, security is infused into every part of your phone, from hardware to software. So private data stays private.
Initially, users will be able to buy/sell 33 different cryptocurrencies, including Bitcoin and Ethereum (ETH, Rated “A-”).
I don’t expect this new crypto feature to materially impact Samsung’s market share. But I do think it will dramatically impact the price of cryptocurrencies. Especially Bitcoin.
Don’t make the mistake of underestimating the impact of pre-loaded crypto wallets. I think it will jump start the fortunes of cryptocurrencies, very much like the fortune of Google when Apple added its search bar to iPhones.
I am constantly surprised at how clueless people my age — yes, I am an AARP-eligible old fart — are about buying cryptocurrencies. My kids can whiz around mobile apps like speed skaters, but a lot of people my age (who have all the money by the way) don’t know where to start.
The new Samsung S20 series is going to make it so easy, I expect crypto participation rates to skyrocket. And more investors means higher crypto prices.
Now, any and all crypto assets could benefit from this. But my money is on the King of Crypto to take in the biggest share of new investors. This is because I expect most of the crypto newbies to buy Bitcoin simply because it has the most name recognition.
Yes, I understand it may be inferior from a technology standpoint to other cryptocurrencies. But as my colleague Juan Villaverde is quick to point out, adoption rate, or popularity, is more important in some cases. And Bitcoin definitely wears the crown when it comes to name recognition.
And when Apple adds a crypto wallet to the iPhone — an I absolutely believe they will — cryptocurrency prices will explode.
Weiss Ratings does not accept any form of compensation from creators, issuers or sponsors of cryptocurrencies. Nor are the Weiss Cryptocurrency Ratings intended to endorse or promote an investment in any specific cryptocurrency. Cryptocurrencies carry a high degree of risk. The SEC, CFTC and other regulators have expressed concerns with the volatility of the market and the actions of sponsors of specific cryptocurrencies. Be sure to review their official consumer alerts such as the public statement on cryptocurrencies by the SEC.