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Will Nexo Crypto Deal Benefit Mastercard Stock?
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Will Nexo Crypto Deal Benefit Mastercard Stock?

Mastercard (MA) has teamed up with Nexo to launch a crypto-backed payment card. MA stock gained about 2.7% to close at $355.14 on Wednesday. Nexo operates a crypto trading and lending platform while Mastercard processes card payments. 

In addition to Mastercard, Nexo is also working with DiPocket on its crypto card project as the issuer. The Nexo Card offers users a credit line backed by their crypto assets as collateral. As a result, holders can spend without having to sell their crypto assets.

Holders can spend up to 90% of their crypto value, as measured in fiat currency. The card supports multiple crypto-collateral types, including Bitcoin, Ethereum, and Tether, which is a stablecoin that tracks the U.S. dollar.

The Nexco Card is available in physical and digital forms, and can be integrated into mobile payment services like Apple Pay and Google Pay. The card is initially rolling out in select European countries, and can be used at more than 92 million merchant locations globally that accept Mastercard. Users can receive up to 2% back with every purchase.

Wall Street’s Take

Consensus among analysts is a Strong Buy based on 14 Buys. The average Mastercard price target of $434.21 implies upside potential of 22.3% to current levels. Shares have gained 3.3% over the past six months.

Hedge Funds

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in MA is currently Very Positive, as 66 hedge funds increased their cumulative holdings of the stock by 5.7 million shares in the last quarter.

Takeaway for Investors 

Mastercard makes money by charging fees to those that use its technology. Therefore, being part of Nexo’s crypto card opens another revenue opportunity for Mastercard. The Nexo partnership could also help Mastercard minimize the blow from shutting down its Russian operations. Investors like to see their companies grow, and the Nexo deal is one that could make Mastercard stock look more attractive to investors.

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