Bitcoin Trading Helped Square More Than Double in Value Last Year

Shares of payment firm Square Inc. more than doubled in value last year, and the company has seen an almost 50% increase in its stock since it began offering Bitcoin trading to it’s customers in November.

Square added about $8 billion in market value since it rolled out Bitcoin trading in November on its Cash App, used by U.S. customers who want convenient access to cryptocurrencies without the hassle of dealing with centralized exchanges.

CEO, and Twitter co-founder, Jack Dorsey has been a staunch supporter of digital currencies, stating earlier this month that ‘the internet deserves a native currency,’ according to Bloomberg.

Looking to the future, Square’s gross payment volume could reach $409 billion in 2026, or 4.1% of total U.S. payment volume, RBC Capital Markets analyst Daniel Perlin predicted in a May 22 note to clients. In fact, the most recently reported quarter marked the 10th consecutive period that the firm topped analysts’ sales projections.

“Square’s integrated hardware, software and services solutions position the company to benefit from ongoing card acceptance penetration at smaller merchants while gaining share against existing solutions that lag from a technological or efficiency-basis,” wrote Perlin, who has the equivalent of a ‘buy’ rating on the stock.

Fortunately for Square, it’s not just cryptocurrencies that are contributing to soaring stock prices. The San Francisco-based firm’s shares have gained 25% since the company announced in April that it was buying website-creator Weebly for $365 million — the firm’s biggest acquisition ever. The deal is a key part of Square’s plans to bulk-up its online and e-commerce offerings and gives the firm another recurring revenue stream as well as a new base of customers.

Originally, Square was started as a payment system to serve small businesses priced out of traditional banking services. The concept was conceived when an artisan glassblower and friend of Dorsey needed a better way to process credit and debit card payments. The company has made massive gains since then, and shows no signs of slowing down. 

When Square’s cryptocurrency services were unveiled there were still some states where it was prohibited, like Georgia, Hawaii, Wyoming, and New York, due to local laws that regulate the movement of digital funds in attempts to prevent money laundering. This has slowly been changing. In a bid to win over future business opportunities with blockchain-based companies, Wyoming passed legislation earlier this year that exempts some cryptocurrency trading operations from its money transmitter laws.

The law, known as HB70, was among five crypto-friendly laws presented to the governor’s desk aimed at permitting cryptocurrency and blockchain companies to do business in the state. Square was quick to take advantage of Wyoming’s change in legislation, soon after making their Bitcoin services available to residents of the state.

Then there’s New York. New York passed it’s Bitlicense cryptocurrency regulatory framework in 2015 under mounting pressure from banking lobbies, the U.S. Securities and Exchange Commission (SEC), and the New York District Attorney’s office. Since then only a handful of the licenses have been granted — and Square is looking to get in on the action next.

A spokesperson for Square confirmed in March the firm’s bid to obtain a license via a tweet. Square made its announcement as legislators in New York are apparently in the process of making changes to the 2015 legislation which will allow more flexibility for cryptocurrency-based businesses in the state.

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