Square Cash, the mobile payments app operated by San Francisco-based financial services company Square, has seen faster growth than their fiercest competitor, PayPal’s Venmo app, according to new analysis from Nomura’s Instinet.

A report sent to Instinet clients from analyst Dan Dolev concludes that Square Cash is quickly catching up to Venmo’s install base, with nearly 28 million cumulative downloads of the Square Cash app, a mere $1 million behind Venmo, despite releasing 4 years later. Square Cash’s downloads have averaged a strong 128 percent year-over-year growth since 2016, with Venmo only managing 74% year-over-year growth comparatively.

Dolev says that historically Venmo has received more downloads than Square Cash, but the gap peaked in July 2017 and has shifted in favor of Square Cash.

While it’s been widely reported that Square only earned $200,000 from bitcoin transactions in Q1 2018 since its January launch, Dolev believes that offering bitcoin may have helped spark the app’s accelerated growth, comparing Square Cash app downloads to Coinbase’s app.

“With Square Cash App now open for Bitcoin trading in most states, comparing its growth versus the popular Coinbase app is noteworthy.” Dolev continued:

“Here, while Coinbase saw growth peak around the holiday time — as Bitcoin prices spiked — Coinbase’s growth has slowed from record levels, whereas Square Cash App experienced more balanced growth.”

Dolev’s report reiterated Square stocks as a ‘buy’, targeting $65 per share over the next 12 months, representing a predicted 18% increase. Shares of Square, Inc. were up 1.9 percent at the time of this writing.

Square’s CEO Jack Dorsey is a “huge fan” of bitcoin, and believes it’ll become the Internets “native currency” according to his comments on stage today at Consensus 2018. Dorsey plans to “help it happen” by supporting it as a method of payment for everyday use through the Square Cash app.

square cash

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.