- Jack Dorsey’s company is testing support for bitcoin through its Cash payments app, according to a TechCrunch report overnight.
- “We believe it could place SQ in an early-mover position as a mainstream fin-tech company providing crypto-currency services,” Credit Suisse research analysts Paul Condra and Mrinalini Bhutoria say.
- “We believe PayPal (PYPL) is also well positioned to provide such services,” the analysts say.
Traders have another potential stock play on bitcoin: Square.
Jack Dorsey‘s company is testing support for bitcoin through its Cash payments app, according to a TechCrunch report overnight. Square did not immediately respond to a CNBC request for comment.
Shares of Square jumped 3 percent in premarket trading Wednesday as one Wall Street firm was quick to recommend the stock on this potential development.
“We believe it could place SQ in an early-mover position as a mainstream fin-tech company providing crypto-currency services,” wrote Credit Suisse research analysts Paul Condra and Mrinalini Bhutoria on Wednesday. “SQ is also well positioned to enable crypto transactions at the physical point of sale.”
Buying and selling bitcoin has become a big business. Coinbase, the leading U.S. platform for such services, has 12.5 million users and says on its website it has exchanged $40 billion worth of digital currency. That means Coinbase’s user growth has more than doubled from 5.5 million in January, according to analysis of public data compiled by Alistair Milne, co-founder and chief investment officer of Altana Digital Currency Fund.
Source: Alistair Milne, Coinbase
Bitcoin has leaped more than seven times in price this year. The digital currency recovered from a sharp weekend plunge and traded more than 8 percent higher Wednesday above $7,100, according to CoinDesk.
Other stocks have surged this year following news the companies were working on bitcoin-related projects. Notably, shares of Overstock.comare up 187 percent this year as its roughly three years of work in developing businesses related to bitcoin’s blockchain technology caught investors attention.
As for Square, “we believe the largest risk is regulation, which could limit its ability to provide the service or outright ban it. SQ is also exposed to liquidity and counterparty risk as it must source bitcoin for users either by pre-buying or using an exchange,” the Credit Suisse analysts said. “Despite these risks, the upside could be significant if crypto currencies become more mainstream. We believe PayPal (PYPL)is also well positioned to provide such services.”
You might also like
More from Bitcoin
Bitcoin Breaks Through $8,000 Following Massive Head Fake
Bitcoin just surmounted the $8,000 level, topping out at $8,020 on Bitfinex before retreating to $7,900 at press time. By …
China’s bitcoin crackdown has helped Japan embrace the cryptocurrency movement
A year ago, China accounted for 90 percent of all bitcoin trade. But since Beijing banned initial coin offerings (ICOs) …
Survey: Bitcoin Investors Won’t Sell Until Price Nears $200k
New survey data highlights the ideological and economic factors driving some investors to purchase bitcoin. A new report published today by LendEDU – …