Cryptocurrency Regulatory Landscape Influences Divergent Views on Figure

The cryptocurrency regulatory landscape is shaping differing opinions on Figure, a new fintech player with a promising start in blockchain-based lending. As Figure aims to enhance its platform beyond home equity lines of credit, major Wall Street investment banks are sharing opposing outlooks on the company’s future.

Navigating the Cryptocurrency Regulatory Landscape

Keefe, Bruyette & Woods (KBW) issued an “outperform” rating for Figure with a 12-month price target of $48.50, indicating a 17.5% potential increase. According to KBW, Figure shows strong potential in tokenized credit markets, dominating 73% of the private credit sector and capturing 39% of all tokenized real-world assets. Founded by former SoFi CEO Mike Cagney, Figure went public in September and has already risen by 12% since its IPO. Its primary operation involves tokenizing home equity lines of credit (HELOCs) and linking borrowers to investors via an integrated platform for loan origination, distribution, and marketplace for digital assets.

KBW sees opportunities ahead for Figure’s technology in handling a broader spectrum of credit offerings, such as first-lien mortgages and personal loans. Products like Figure Exchange and a tokenization tool for third-party assets could also drive their growth.

Supporting this optimism, Bernstein has described Figure as doing for lending what stablecoins accomplished for payments, driving efficacy in traditional markets through asset tokenization. In another positive analysis, Bernstein assigned Figure an “outperform” rating with a $54 target price.

The Challenges within the Cryptocurrency Regulatory Landscape

In contrast, Bank of America has taken a more restrained stance, suggesting greater caution by issuing a “neutral” rating and a $41 price prediction. It identifies execution risks, regulatory challenges, and the company’s reliance on its HELOC business—which remains non-blockchain-native—as potential hurdles.

The cryptocurrency regulatory landscape impacts the future viability of Figure’s innovations like Figure Connect, its new marketplace intended for lenders and capital providers to connect. BofA anticipates this venture to contribute significantly to the firm’s revenue between 2024 and 2027, forming 75% of total revenue growth.

While recognizing Figure’s leadership in consumer lending, BofA is skeptical about the scalability of its fintech model amid potential regulatory changes, onboarding roadblocks for major institutions, and rivals leveraging similar blockchain technologies.

The split between KBW’s $48.50 and BofA’s $41 price targets highlights the uncertainty surrounding the maturity of Figure’s blockchain framework within the broader industry.

At Bakara Invest, our analysis suggests that although the cryptocurrency regulatory landscape poses challenges, Figure’s innovative use of tokenization in lending has the potential to revolutionize financial markets if successfully navigated.

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