Downloads of Square Cash, boosted by its Bitcoin exchange, are growing faster than PayPal Holdings‘ (PYPL) Venmo app, says an Instinet analyst.
San Francisco-based Square (SQ) makes credit-card readers that plug into mobile phones and tablets. In November, it set up a Bitcoin exchange so that users of its Square Cash app could buy and sell the digital cryptocurrency.
“Square Cash App downloads are growing faster than Venmo, with growth accelerating in recent months,” Instinet analyst Dan Dolev said in a note to clients Wednesday. “With about 28 million cumulative downloads, the number of Square Cash app downloads is only roughly 1 million below PayPal Venmo levels, as the spread between the two increasingly converges.”
Venmo is a popular money-transfer service for millennials. With Venmo, consumers link a bank account to a smartphone app and send money to friends or family using an email address. Apple (AAPL) has also launched a Venmo-like service.
Bitcoin Not Money Maker
Bitcoin has not been a big moneymaker for Square. Square said Bitcoin accounted for $34 million in gross revenue in its first quarter. That’s the total sale amount of Bitcoin to customers.
But adjusted revenue from Bitcoin during the period was $200,000. That’s Square’s Bitcoin sales to app users, minus the cost of purchasing the digital currency.
Square stock jumped 3.6% to close at 56.59 on the stock market today. Square has a buy point of 58.56, having formed a cup chart pattern. The stock has jumped 190% from a year ago.
Alternative To Coinbase
Square Cash app for Bitcoin is an alternative to Coinbase, the best-known cryptocurrency exchange. Coinbase customers can purchase Bitcoin, Litecoin and Ethereum. Coinbase on Tuesday unveiled new tools for institutional investors.
“With Square Cash now open for Bitcoin trading in most states, comparing its growth vs. the popular Coinbase app is noteworthy,” added Dolev. “While Coinbase saw growth peak around the holiday time — as Bitcoin prices spiked — Coinbase’s growth has slowed from record levels, whereas the Square Cash app experienced more balanced growth.”
CEO Dorsey All In On Bitcoin
Square Chief Executive Jack Dorsey, meanwhile, spoke at a cryptocurrency conference in New York City on Wednesday.
“The internet deserves a native currency; it will have a native currency,” Dorsey said, according to a Bloomberg report.
“I don’t know if it’ll be Bitcoin or not,” he said, but “I hope it will be.”
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