Financial services giant Credit Suisse says that bitcoin integration “confers legitimacy” on bitcoin and will prove to be a financial boom for payment processing startup Square.
Credit Suisse Bullish on Square’s Bitcoin Play
Credit Suisse is not known for being bullish on bitcoin. Tidjane Thiam, the firm’s CEO, has called bitcoin the very definition of the bubble, and the company has not shown an interest in directly engaging with the crypto markets. That said, Credit Suisse is very optimistic about Square’s recent decision to test bitcoin sales within its popular Square Cash app.
As reported by CNBC, Credit Suisse analyst Paul Condra predicts that Square will attract or convert 10 million users into bitcoin buyers within two years, leading to an incremental $30 million in annual revenue. This estimate is based on the assumption that users will spend $200 per year — leading to $2 billion in annual volume — and Square will charge a modest 1.5 percent transaction fee. In response to the announcement, Condra raised his price target for Square shares to $37 from $31.
Square Cash ‘Confers Legitimacy’ on Bitcoin
In a note to Credit Suisse clients, Condra went a step further, forecasting that bitcoin integration will “confe[r] legitimacy” on bitcoin and lead other mainstream businesses to feel comfortable adding support for digital currencies.
From the note:
“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,” Condra reportedly wrote.
The bitcoin price has risen considerably since Square began its bitcoin trial, in part based on speculation that Square will eventually enable merchants to accept bitcoin through its payment processing platform. On Monday, the bitcoin price rose to a new all-time high, peaking at $8,315 on bitcoin exchange Bitfinex.
Not lucky enough to be able to participate in Square Cash’s bitcoin trial? You can buy bitcoin using a credit card through Block Explorer using USD or EUR.