Facebook Inc. (FB) - Get Report shares extended gains in premarket trading Monday, while Bitcoin prices traded firmly past the $9,000 level, as investors prepped for tomorrow's 'white paper' from the social media group outlining its plans for a platform cryptocurrency.
The potential launch of GlobalCoin, which would give the group's 2.4 billion monthly active uses the ability to concert their local currency into a Facebook-useable digital coin that could be used for payments, commerce or gaming, has supported Facebook shares over the past few sessions, with RBC analysts Mark Mahaney and Zachary Schwartzman predicting an "existential risk" that may arise from "a rapid, global consumer adoption of crypto tokens for
payments and commerce."
"We believe this may prove to be one of the most important initiatives in the history of the company to unlock new engagement and revenue streams, and we plan to provide an analysis of the White Paper to help investors analyze the underlying cryptoeconomics of the token," the pair wrote in a recent research note.
Facebook shares were marked 3.15% higher Monday to change hands at $187.04 each, a move that would take the stock's six-month gain to around 35%.
Bitcoin prices, meanwhile, were marked 1.3% higher on the Monday session at $9,334.89 each and have surged more than 150% over the past six months as investors react to a series of moves to allows mainstream uses of digital currencies and exchange-traded derivatives contracts see increasing volumes.
Last week, Dow Jones Newswires reported that several big-name tech companies, Uber Technologies (UBER) - Get Report and PayPal (PYPL) - Get Report , as well as traditional payments firms such as Visa (V) - Get Report and Mastercard (MC) - Get Report , were supporting Facebook's cryptocurrency, which will be pegged to a basket of global fiat currencies, with an investment of $10 million each.
The structure could be similar to the digital currency established earlier this year by JPMorgan Chase (JPM) - Get Report , which was designed to develop the bank's payments business over blockchain technology.
"We believe Facebook's massive international scale provides an instant network for
consumers and merchants to transact using a stable token with several benefits that crypto delivers such as near-instantaneous transactions with limited consumer "custody" roadblocks, RBC's Mahaney and Schwartzman wrote.
Facebook CEO Mark Zuckerberg has also stressed the company's near-term focus towards e-commerce offerings, promising investors that the group will build "more tools for people to buy things directly through the platform."
"Over the long-term, if Payments becomes a really important part of what we do, we can - we'll have some options and choices about how we choose to - how to have the revenue flow to us in the future," Zuckerberg told investors following the company's second quarter earnings in April.