During the first quarter of 2018, Square stock had its fair share of volatility. Its price had declined by 76% since November 2021, when it reached a high of $68,900. Nevertheless, the company’s Accumulation/Distribution Rating remains at A-minus. In addition, a new business line has been established to help developers build financial services products focused on Bitcoin.
Bitcoin price has retreated 76% since peaking around $68,900 in November 2021
Having soared to an all-time high of almost $69,000 in November 2021, the price of the most widely traded cryptocurrency has now retreated 76%. The fall comes as investors and analysts begin re-assess the market’s direction.
The first half of this year has been a period of intense trading activity. As a result, the overall market capitalization of cryptocurrencies has declined from more than $3 trillion in late November to less than $1 trillion.
The Fed announced plans to taper bond purchases in late 2021. This forced liquidity out of the financial markets, a prospect that drove investors from risky assets like cryptocurrencies. In response, the price of cryptocurrencies dipped as well.
After the Federal Reserve announced a rate hike in December, the 10-year Treasury rate rose. In turn, investors feared higher interest rates would tame inflation. Eventually, this fear drove interest rates higher, further tamping down the rising prices of cryptocurrencies.
While cryptocurrencies have dipped, institutional investors are beginning to bet more on the technology. As a result, the correlation between stocks and cryptocurrencies has become more prominent.
Block’s new business line to help developers build financial services products focused on Bitcoin
Taking the acronym above and doubling down, brief research on Square’s website revealed a new business line dedicated to helping developers create financial services products geared towards the bitcoin ecosystem. As such, the company has retained the SQ ticker. The new business line includes a new product to build the two-sided digital payments ecosystem and another to help developers create intelligent contracts for use in fintech, cryptography, and real-world transactions. The company also reveals that it plans to build a new flagship store in Manhattan by the end of the year.
Although Square is a long-time bitcoin proponent, it has not yet come out with a fully-fledged Bitcoin wallet, and its mobile app does not yet allow for deposits or withdrawals. This, however, is likely to change soon, as the company is reportedly looking to expand its mobile and desktop offerings. The company may also partner with other companies, such as Afterpay, to provide merchants with the means of accepting payments in Bitcoin, and has vowed to build out its e-commerce offerings.
Accumulation/Distribution Rating of A-minus
Amongst the plethora of financial technology stocks, Square (SQ) ranks high on the list of fintech companies. In particular, its acquisition of Australia-based consumer lending startup Afterpay has positioned the company to compete in the emerging “buy now, pay later” market. The company also recently acquired majority ownership of Jay-Z’s Tidal music streaming service.
The company also has an impressive suite of financial services, including a micro-credit card and point of sale (POS) software. Its latest move is to acquire the tax business of Credit Karma, a free service for consumers.
The company is also interested in building a hardware wallet based on the technology behind its mobile app. This technology is the next big thing in the digital age. The company recently announced a $170 million investment in early 2021. Unfortunately, the stock has had a tough time lately, dropping 71% from its all-time highs.
Square has increased its insider voting power using a dual class standard stock structure. The company has also made several notable purchases of late, including a $50 million investment in October.
Relative strength rating of 20
Using the relative strength index to select stocks is a “buy high, sell higher” strategy that gives signals to professional traders. The index compares the performance of a stock to that of the overall market and indicates whether an issue is overpriced. It also tells you which stocks are the best investments to make.
If you’re looking for a stock to invest in, you need to find one with a solid fundamental basis. This can be done by checking a stock’s EPS rank and PEG ratio. A substantial EPS rank indicates a company’s ability to grow its sales and profits. The PEG ratio is similar to the P/E ratio but considers the expected growth rate of earnings. The Zacks Industry Rank is also important, as it measures the quality of a company’s market performance.
Square (SQ) has a solid buy-the-dip support level. Despite the all-time highs in intraday trading, the company fell almost 65 percent from its peak to its trough in September 2018. A short-term trend is neutral, but SQ’s future is uncertain. You should wait until the stock’s price settles before making a purchase.
