Research has found that despite a drop in cryptocurrency prices, payment company Square has avoided the same pitfalls and is steadily growing.
‘Square Is More Than Bitcoin Play’
In January, the San Francisco-based company, which was co-founded by Twitter co-founder Jack Dorsey, enabled cryptocurrency trading via its Cash App. Through the app, most customers can buy and sell Bitcoin.
In May, it was reported that Square had sold $34.1 million in Bitcoin during the first quarter. However, at the same time, it had spent $33.9 million to buy Bitcoin. For Dorsey, this is a “small step” toward “greater financial access for all.”
Yet, despite the evident popularity both are having, it seems that Square has not been impacted by recent market prices. This is according to research from Nomura Instinet, reports CNBC. The analysis found that the payment company is growing three percent quicker than PayPal’s Venmo. Additionally, during the months of May and June, it saw nearly two million downloads each month. Dan Dolev, executive director and analyst at Nomura Instinet, told CNBC:
Square is more than just a Bitcoin play. A lot of people were worried because it went up with Bitcoin, but instead it’s decoupling.
Downloads for the Cash App have been good too. In May, downloads rose 154 percent year-over-year. In June, it was recorded at 153 percent. This is despite the fact that Bitcoin prices fell 19 and 15 percent in May and June. News of this comes at a time when downloads for the Coinbase app have declined in line with falling Bitcoin values.
Twitter Shares Drop
Yet, while Square is enjoying a surge, Twitter is not faring quite so well.
A separate report from CNBC shows that shares for the social media platform fell 30 percent because expectations are too high.
Mark Kelley, senior equity research analyst at Nomura Instinet, said in a note to clients yesterday that they view Twitter as a “stable and extremely valuable platform with long-term strategic value,” adding:
However, we see some downside risk to consensus estimates for 2019, particularly to the 1H monetization levels the Street is currently looking for. This, paired with the recent run and current valuation, leaves us expecting a reset to expectations and the stock.
Kelley has a price start target for Twitter shares at $31, representing a 29 percent downside, the report states.
How do you think Square will fare in the future with Bitcoin? Let us know in the comments below.
Images courtesy of Shutterstock.
