Despite bitcoin’s fall, Square's mobile payment app, which launched crypto trading in late January, is surging. In fact, Square Cash is growing roughly three times faster than PayPal's Venmo, with nearly 2 million downloads per month in May and June, according to data from Instinet.
"Square is more than just a bitcoin play," said Dan Dolev, executive director and analyst at Instinet, cited by CNBC. "A lot of people were worried because it went up with bitcoin, but instead it's decoupling."
As bitcoin has fallen in recent months, the Cash App’s growth has surged. The data shows that download rates were particularly strong in May and June, when bitcoin's price fell 19 and 15 percent, respectively. In addition, the app’s downloads rose 154 percent year over year for May and 153 percent in June, Dolev said.
In June, Square got approval from regulators to allow New Yorkers to trade cryptocurrency on the Cash App.
Square’s Founder and Chief Executive Jack Dorsey is a big supporter of bitcoin. In 2014, he helped enable merchants to accept bitcoin as a payment method. He also said in a tweet last year, “Bitcoin: we tried this with our eCommerce store years back. Didn’t see much. Would love to see a digital currency thrive.”
However, the announcement didn't have a material impact on downloads.
"When they opened up trading in New York, you would expect a bump in downloads, but it didn't happen — if you look at the weekly trend it actually slowed slightly," Dolev said.
Instinet added that Square Cash is about 200,000 downloads shy of Venmo’s total 31.4 million, and is on track to exceed Venmo within a couple of weeks, Dolev said. The firm has a "buy" rating and an $82 price target for Square, around $17 above where it was trading on July 11. The stock is up 86 percent this year, and 154 percent year over year.