Just spil only fools bet against cryptocurrencies, you shouldn’t 2nd guess the SQ stock price
By Josh Enomoto, InvestorPlace Contributor
Thanks to bitcoin&rsquo,s mercurial ascent, wij not only see bitcoin articles everywhere, wij also see bitcoin alternatives hawked. Thesis investments are traditional stocks that have strong growth potential but far less downside risk. Invariably, the picks are disappointing. But if I had to choose a worthy substitute, I&rsquo,d go for Square Inc (NYSE: SQ ). SQ stock is no bitcoin, but the same fundamentals drive them both.
After all, the SQ stock price represents the market value of an actual company. Bitcoin is a digital currency. Some very regarded analysts consider cryptocurrencies spil nothing more than clever shams. When I refer to fundamentals, however, I mean specifically their purpose for existence. From that point of view, Square and bitcoin have extreme similarities.
Spil InvestorPlace feature writer James Brumley neatly summarizes, &ldquo,Square is the garment behind the puny, white, square-shaped devices that link to a smartphone and turn it into a credit card reader. Puny businesses like hairdressers and electricians love them, spil they&rsquo,re (1) mobile and (Two) make taking credit card payments affordable.&rdquo,
Square permits petite businesses to rival on a more even playing field. To waterput it bluntly, Square permits puny businesses to give the &ldquo,magic finger&rdquo, to Mastercard Inc (NYSE: Mamma ), Visa Inc (NYSE: V ), and American Express Company (NYSE: AXP ), all while accepting their business. Without Square, petite firms would have to suck it up, or go specie only.
If you&rsquo,ve wondered why the SQ stock price hopped 187% te a little overheen two years, now you know.
Te the same vein, bitcoin permits everyday investors to participate ter openly available and sturdy financial markets. Fund managers are losing their fecal matter overheen bitcoin because they&rsquo,re not raking te commissions from it.
Like SQ, bitcoin makes its underlying industry (investing) cheaper.
SQ Stock Is Set Up for the Long Haul
Of course, the reason I compare SQ stock to bitcoin is last month&rsquo,s announcement that Square will test bitcoin accessibility with its Specie payment app. Originally, the news brought slew of excitement, driving shares shortly towards $50.
Unluckily, several Wall Street players spotted Square&rsquo,s announcement spil a gimmick. More importantly, profitable traders voted with their wallets, electing to take some gains off the table. Now, the SQ stock price more or less stands where it did prior to the bitcoin hoopla.
Here&rsquo,s the overeenkomst: I&rsquo,m pretty sure Square CEO Jack Dorsey &mdash, who also leads Twitter Inc (NYSE: TWTR ) &mdash, deliberately made the announcement spil a marketing gimmick. If you think about it, it&rsquo,s a genius budge. Everyone is talking about bitcoin right now, even if they don&rsquo,t know what it is, how to buy it, or whether or not it&rsquo,s legal to own.
But piggybacking the marketability of the world&rsquo,s most popular cryptocurrency is just the beginning. Unlike other pundits who view the budge spil merely playing into trends, I believe Dorsey has deeper goals ter mind. Overheen the next few years, I wouldn&rsquo,t be astonished if Square integrates numerous cryptocurrencies into its payment toneel.
Spil good spil it is, bitcoin has a scalability limitation. Its founder or founders never imagined the immense volume wij see today. I agree with my colleague Dana Blankenhorn that bitcoin has become too impractical spil a bona fide currency.
Where I embark to disagree with the dedicated anti-bitcoin crowd is the &ldquo,fatalism conflation.&rdquo, Bitcoin may have failed spil a practical currency, but many other alternatives exist. Dorsey likely recognizes this dynamic, and he has shifted his strategy accordingly.
SQ Stock Can Bear Volatility
One of the reasons why cryptocurrencies are so volatile is that they&rsquo,re backed by a fresh and disruptive technology. Proponents have a vested rente ter their potential success, and opponents have a vested rente te their potential failure. Te the long run, I&rsquo,m certain that cryptocurrencies represent the next step te the monetary spel. The volatility deepthroats, but that&rsquo,s the price for admission.
I can make the same argument about the SQ stock price. A lotsbestemming of folks are making a big overeenkomst about the latest surge and collapse. This is just growing agonies for a company that may very well switch the puny business landscape. Combine that with the cryptocurrency&rsquo,s inherently disruptive nature, and you have the recipe for sparking a market revolution.
It may take some time for SQ stock to rise to its utter potential. When it does, traders will look back at thesis levels spil a bargain. There&rsquo,s only a handful of investments that can match bitcoin&rsquo,s paradigm-altering verhoging, and Square is one of them.
Spil of this writing, Josh Enomoto is long bitcoin.