Sequoia Fund Says Blockchain Could Cut MasterCard Earnings

The New York-based operator of a major mutual fund has hinted it believes blockchain technology could be a threat to credit card network operators.

The comments came as part of Ruane, Cunniff & Goldfarb’s annual report on the performance of the Sequoia Fund, the firm’s consolidated portfolio offering. The Sequoia Fund currently holds stock in 10 publicly traded companies as part of its portfolio, with MasterCard accounting for 4.3% of its assets.

In the report, Sequoia praised MasterCard for its strong performance since its 2006 IPO, but indicated that it believes new technologies, including blockchain, will begin to affect the company’s value.

Sequoia wrote:

"MasterCard’s virtues are well-appreciated by the stock market but the evolution of mobile payment habits and the rise of blockchain ledger technology could pose longer term challenges to the company’s wildly profitable business model."

The fund has a storied track record among investors, returning three times more than the S&P 500 during its more successful runs.

In addition to MasterCard, other Sequoia Capital portfolio holdings include Berkshire Hathaway, O’Reilly Automotive and Alphabet, Google’s parent firm.

Correction: An earlier version of this article mentioned Sequoia Capital, a VC firm that is not connected to Sequoia Fund.

MasterCard image via Shutterstock

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.

Pete Rizzo

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.

10 Years of Decentralizing the Future