SoFi Technologies (SOFI) could miss out on opportunities with cryptocurrency’s comeback.
The White House isn’t finished pushing for student loan debt forgiveness.
Investors can hold SOFI stock but shouldn’t feel an urgent need to increase their share positions now.
Fintech firm SoFi Technologies (NASDAQ: SOFI) could represent the future of personal finance, but it’s taking forever for SOFI stock to have its big breakout moment. Ultimately, there’s nothing really wrong with investing in SoFi Technologies for the long term, but be prepared for a bumpy road in the coming months.
In SoFi Technologies, the company has a banking charter and seeks to establish itself as a legitimate financial institution. That’s fine, but SoFi could miss an exciting opportunity in the world of decentralized digital assets. So, consider both the positives and the negatives if you’re considering a share stake in SoFi Technologies.
SOFI Stock: Going Nowhere Since March
Momentum-focused stock traders, be forewarned. SOFI stock has been range-bound since March of this year. The stock has effectively gone nowhere. That’s frustrating, and SoFi Technologies doesn’t offer a consolation prize in the form of dividend payments.
This has occurred even though the major stock-market indexes are significantly higher since March. So, SoFi Technologies can’t use high interest rates or inflation as excuses for letting the shareholders down.
Don’t get the wrong idea. I still like SOFI stock as a bet on the future of neo-banking. Just be patient and don’t be in a hurry to add any shares now, as SoFi Technologies will still have to deal with the White House’s push for student loan forgiveness.
Remember, SoFi Technologies earns some of its revenue from helping its customers refinance their student loans. Hence, it’s a problem for the company when the Biden administration cancels people’s federal student loan debt.
The White House isn’t finished with this battle, as the Department of Education recently disclosed that it’s canceling nearly $5 billion worth of student-loan debt for over 80,000 borrowers. Investors might expect SoFi Technologies to face ongoing challenges with this segment of its business model.
Crypto Bulls: You Won’t Like What SoFi Technologies Just Did
As I alluded to earlier, SoFi Technologies is trying hard to present itself as a legitimate bank that people from all walks of like can trust. Should trust-building involve SoFi Technologies distancing itself from cryptocurrency, though?
That’s the pertinent question as SoFi Technologies plans to terminate its cryptocurrency-trading services on Dec. 19. SoFi Technologies’ current crypto-trading clients can migrate to another firm, Blockchain.com. I suspect that some of them will simply stop trading cryptocurrency altogether.
That’s a shame, as Bitcoin (BTC-USD) is really finding its footing in late 2023. Cryptocurrency and blockchain bulls will probably want to see SoFi Technologies leaning toward the pro-crypto movement, but it looks like the company is taking a big step back.
Maybe, SoFi Technologies’ management is worried about the scandals involving FTX and Binance. Yet, it’s entirely possible for a legitimate, established financial firm to have crypto connections. A great example would be BlackRock (NYSE:BLK), which seeks to get a spot Bitcoin exchange traded fund (ETF) approved for public trading.
Don’t Rush Into a Long Position With SOFI Stock
All in all, I still appreciate SoFi Technologies’ forward-looking spirit and the company’s drive to innovate. However, some folks might not like SoFi’s apparent move away from the world of cryptocurrency.
Therefore, if you’re a dyed-in-the-wool crypto bull, there’s no need to invest in SoFi Technologies right now. Besides, the White House’s efforts to forgive student-loan debt could persist for a while.
In the final analysis, it’s fine to hold SOFI stock if you already own it. Just don’t assume that a share-price breakout will happen anytime soon. Don’t be in a huge hurry to add to your SoFi Technologies share stake right now. Be patient, as you may get in at a lower price soon.