Mastercard Joins Tesla, PayPal in Crypto Revolution

Payments giant Mastercard Incorporated (MA) announced Wednesday via a company blog that it plans to start supporting select cryptocurrencies directly on its network later this year. The decision comes three months after rival PayPal Holdings, Inc. (PYPL) said it would add select cryptocurrencies to its platform and several days after electric car maker Tesla, Inc. (TSLA) announced in an SEC filing that it has invested $1.5 billion into Bitcoin and plans to accept the pioneer crypto as payment.

Although Mastercard did not disclose which digital currencies it will support, a source familiar with the matter told CoinDesk that digital currency payments would settle in cryptocurrency at participating merchants. Mastercard already has existing partnerships with prominent crypto payment firms Wirex and BitPay but currently requires a conversion of digital currency payments back to fiat currencies on its network.

“Our change to supporting digital assets directly will allow many more merchants to accept crypto — an ability that’s currently limited by proprietary methods unique to each digital asset. This change will also cut out inefficiencies, letting both consumers and merchants avoid having to convert back and forth between crypto and traditional to make purchases,” wrote Raj Dhamodharan, the company’s executive vice president of digital asset and blockchain products.

Through Wednesday’s close, Mastercard stock has a market capitalization of $332 billion, issues a modest 0.53% dividend yield, and trades 6.37% lower since the start of the year.

Wall Street View

Last month, Jefferies analyst Trevor Williams upgraded the stock to ‘Buy’ from ‘Hold’ and raised the firm’s price target to $415 from $315. Williams argues that the company’s cross-border payments division, which accounts for around 25% of total revenues, sits well-positioned to benefit from a recovery in travel after the vaccine rollout.

Mastercard also racks up positive coverage elsewhere on Wall Street. It receives 29 ‘Buy’ ratings, 4 ‘Overweight’ ratings, and 9 ‘Hold’ ratings. Currently, no analysts recommend selling the shares. Look for further brokerage research in the weeks ahead after the company’s latest pledge to brining digital currencies to its platform.

Technical Outlook and Trading Tactics

Mastercard shares have formed a short-term inverse head and shoulders over the past two months, with the pattern’s head finding a confluence of support from the 200-day simple moving average (SMA) and a horizontal trendline. Furthermore, the relative strength index (RSI) sits just above 50, giving the price ample room to test higher prices before consolidating.

Those who buy here should consider setting a take-profit order near the stock’s all-time high (ATH) at $367.25 while managing risk with a stop placed beneath the pattern’s right shoulder at $330.

For a look at today’s earnings schedule, check out our earnings calendar.