Why Congress Sold These 4 Fintech Stocks Before the Stablecoin Act
Discover why top Congress members sold major fintech stocks before the Stablecoin Act, and what this means for Visa, PayPal, SoFi, and the future of payments.
Recently, two well-known members of Congress sold large amounts of stock in four major financial technology (fintech) companies. These companies include Visa, Global Payments, Capital One, and Wells Fargo. The timing of these sales is important because they happened just before a new law called the Stablecoin Act was passed by the Senate on June 17th.
What Is the Stablecoin Act?
The Stablecoin Act is a new law that affects digital money called “stablecoins.” A stablecoin is a type of cryptocurrency that is tied to a real-world asset, like the US dollar. This law now requires that every stablecoin must be backed by real money or government debt. This means companies can’t just create digital money out of thin air—they need to have real dollars or government bonds to support it.
Why Does This Matter for Fintech Stocks?
Fintech companies like Visa, PayPal, and Global Payments make money by helping people and businesses move money around. They act as “middlemen” in payments. But with the new law, big companies like Amazon or Walmart could create their own stablecoins. This would let them handle payments themselves, without needing Visa or PayPal. If more companies do this, it could mean less business for the traditional payment networks.
What Happened to the Stocks?
After the law passed, stocks like Visa and Global Payments dropped in value. Investors are worried that these companies will face more competition and might not make as much money in the future. Some people might think this is a good time to “buy the dip” (buy stocks when prices are low), but it’s important to look at the bigger picture.
How to Read Stock Charts
When looking at a stock chart, there are a few simple rules to follow. For example, if a stock falls below a certain “support line” (a price level where the stock usually stops falling), it can be a warning sign. On the other hand, if a stock’s “lows” keep getting higher, it might be getting ready to go up. These patterns help investors decide when to buy or sell.
What About SoFi and Rocket Lab?
SoFi is another fintech company, but it is not a payment processor like Visa or PayPal. SoFi focuses on things like student loans and personal lending. The new law could actually help SoFi by making its business more efficient. Recently, SoFi’s stock price went up by 6.5%, which is a good sign for investors.
Rocket Lab, with the ticker symbol RKLB, is also mentioned as a company with big potential. It’s important to understand what a company does before investing. Rocket Lab is involved in space technology, which is a very different industry from fintech.
Key Takeaways
The sale of these fintech stocks by Congress members suggests they expect big changes in the industry. The Stablecoin Act could make it easier for big companies to handle payments themselves, which could hurt traditional payment networks. Investors should pay attention to stock chart patterns and understand the reasons behind price changes before making decisions.
For more insights into fintech and stock market trends, check out Goat Academy’s About page to learn more about Felix Prehn and Goat Academy community.