Photo © dennis smith (cc-by-sa/2.0)
According to a Wall Street firm, Square can have tens of millions of annual revenue if it supports Bitcoin.
The company revealed on November 15 that it is testing support for Bitcoin via its Cash payments application.
On Monday, Paul Condra, a Credit Suisse analyst, wrote to clients in a note that is entitled “Going Crypto: Exploring the Bitcoin Play. He said: “While we are positive on Square’s strategy, to the extent it confers legitimacy on Bitcoin and prompts adoption by other providers (i.e., PayPal) the biggest beneficiary may be the crypto-asset industry,”
“We estimate that if Square can accumulate 10m bitcoin buyers over two years (tracking Coinbase’s growth), this could drive an incremental $30m in revenue.”
According to his estimates, the analyst said that the company might collect a fee that is worth 1.5 percent per transaction and the average customer could spend around $200 per year in bitcoin purchases.
Condra reiterated his neutral rating and raised his price target from $31 to $37 for Square shares, representing a 16 percent downside to Friday’s close.
On Monday, the shares of the company rose 3 percent after the report.