The share price of digital payment company Square app had been in an astonishing tear mode since it went public back in November 2015. The stock price is currently trading at $136.8 after reaching an all-time high of $166.6. Since the Initial Public Offering (IPO), the stock price has returned a whopping 1750% for early investors. A large part of this is being attributed to the Cash app.
If you probably invested $10,000 in Square stock during the IPO, the value of your investment would have been worth about $175,000 as of September 1. It’s unarguably an incredible ride and a value-driven investment for early investors. What could have fueled this rally for Square app? Today we explore that in this article.
Cash App by Square
Cash App is a financial product issued by Square, a payment app that allows for direct and immediate peer to peer payment via mobile devices. The payment app also allows users to get non-mandatory debit cards that allow for easy spending of cash directly from the Cash App and seamless withdrawal from any ATM.
Since its launch, the payment App has gained a lot of traction as most people will prefer to tie their bank account to the Square App for easy financial transactions. This year, the Square App has opened its door to a series of innovations, including diving into the cryptocurrency industry.
A couple of unique factors sets Cash App aside from other online payment platforms, the main among them being the Cash Card, a free Visa-certified debit card that Cash App users can apply for at any time.
Square App Decision To Support Bitcoin Was A Massive Move
On June 26, the San Francisco-based payments company Square app announced its intention to make Bitcoin (BTC) deposits available on its Cash App. The company had announced that Cash App users will now be privileged to deposit Bitcoins from external wallets into their Bitcoin address in the app, providing full support for the most popular digital currency.
According to Square’s announcement, deposits are limited to $10,000 worth of Bitcoin for any given week, which is 7 days. The move was considered massive in the crypto airwave and a thumbs up in the continuous march for mainstream adoption for Bitcoin and by extension other digital cryptocurrencies.
Square’s move to support Bitcoin in its payment app wasn’t unprecedented as the founder, Jack Dorsey has been a proponent of Bitcoin. The company has reportedly been crypto-friendly, moving a chunk of its assets into the Bitcoin market.
It has been investing heavily in Bitcoin and the entire ecosystem, bringing in $65.5 million in revenue through the world’s largest cryptocurrency by market cap in the first quarter of 2019 alone.
Since declaring support for the largest cryptocurrency by market, the share price of Square (NYSE: SQ) has maintained an upward trajectory movement, reaching an all-time high of $166.6. Considering the ravaging coronavirus, the rally has been phenomenal. It has printed over 350% gains since the march 12 black Thursday selloff across the financial markets .
Consequently, since declaring support for Bitcoin, the stock price has rallied 107.5% to reach an all-time high on September 1.
Why The Massive Rally?
The value-driven platform has had some solid momentum behind it recently. Especially as the effects of the Covid-19 pandemic intensified, there has never been an increased need to adopt a cashless and contactless mode of payment. The Square’s Cash App has been instrumental in helping sellers and buyers to pivot online and has been a PPP loan facilitator.
While Square stock has done more than 3x since the March lows, it’s pretty fair to say the platform has been relentless in delivering value to the commercial community especially as it expands its support towards the cryptocurrency sphere to further strengthen cashless payment.
Over the past months, Square had successfully added new sellers and cross-sell products and services that drove revenue growth higher. Its seller-base is well-diversified, global and includes businesses across retail, restaurants and other services. All these factors have capitalized on the market gains to shoot the stock price even higher.
What Would The Future Look Like For Square App Stock Price?
The total market capitalization of fast-growing fintech Square (NYSE: SQ) currently sits at $64.93 billion as at the time of writing. The United States stock market entered a retracement phase on September 2, including Square. While this is considered a healthy retracement, most investors would likely see it as a buying opportunity.
But how long before the next rally begins? The Cash App is the key to Square’s long-term growth. Before the move to support Bitcoin payment, Square had stated that “Customers increasingly used Cash App as a way to send and spend money: In June, Cash App had more than 30 million monthly transacting active customers, with more than 7 million spendings on Cash Card.”
With the penetration into the cryptocurrency market which boosts further expansion, the more potential upside could be envisaged. As such, Square is well poised to disrupt the peer to peer financial products industry that may be in direct competition with retail banking solutions.
With that in mind, most long-term investors who are looking to take on some volatility in the near-term would probably seize every opportunity this pullback presents to them to accumulate quareapp stock at a significant discount.