1 Reason to Buy Block Stock, and 1 Reason Not To
Block Inc. (NYSE:SQ) is an American software and hardware company. It develops technologies that allow businesses to accept digital payments and services to enable all related data to be analyzed appropriately.
Sadly, it’s been somewhat infamous ever since its market value dropped by half its original amount. Something that has been taking place over the last three months.
Nonetheless, even these lowered values were twice from two years ago. So, is it still recommendable to invest in Block today? Let’s go over one reason why you should and why you shouldn’t.
One Reason to Invest in Block: Its Cash App Is Still Growing
Initially, Block launched its Cash App for acquaintances to make monetary transactions on the go. But as time went on, it evolved into an app that everybody could use for various purposes. Like the following:
- Bitcoin trades.
- Free stock trades
- Digital banking services
- Among several others, with more to come in the future.
Cash App’s number of active customers hit 70 million this past August. For reference, in 2020, it stood at around 36 million, and that’s remarkable growth.
As expected, this means that Cash App’s revenue increased as well. From 2019 to the first nine months of 2021, it grew from $1.11 billion to $9.76 billion.
Not to mention, as the economy slowly reopens, we can expect tons of recovering businesses to return to Cash App. In the best case scenario, this would restabilize Block’s inner finances.
Without a doubt, such facts can be attractive to any investor.
One Reason Not to Invest in Block: Its Bitcoin Ventures
For those who don’t know about it, Blocks is a company constantly working towards promoting Bitcoin trades. They’ve recently done their part of the deed by adding the option to do so in Cash App.
For those interested in Bitcoin but still skeptical about it, this would be a great way to gain exposure to the crypto community. However, in Block’s case, there happens to be a catch.
CEO Jack Dorsey has previously shared the company’s interest in developing its open-source mining system. If successful, this initiative would decentralize the Bitcoin mining market, which is something extraordinary.
Nonetheless, doing such a feat would take a lot of time and resources. So there’s a lot of risks that Block could lose its way and have its Cash and Seller business suffer as a result.
Given that it currently is its primary source of income, all shareholders would share that risk. Depending on your situation, you might not be open to this sort of financial compromise.