Bitcoin trading volume on Square and Binance are a key metric for cryptocurrency investors who track the market's movements. Unlike much of the cryptocurrency exchange industry, which suffers from inflated figures, investors trust Binance and Square's numbers.
That's because Square's on the hook with the SEC to keep his numbers straight, and Binance is just like that. It is the most trusted cryptocurrency exchange among digital asset investors despite the light financial regulations of Malta where it's incorporated.
What do these numbers tell investors?
Square's Q4 letter to shareholders reported that the payments giant processed over $50 million in bitcoin purchases in Q4 2018, a year-end surge in bitcoin purchases that put Square's yearly total at $166 million for 2018.
That's not bad growth since November 2017 when Square Founder Jack Dorsey added Bitcoin buying and selling, and a wallet custody service, to the widely used Cash App.
Adding Bitcoin to Cash App was a Very Profitable Move For Square
It's what the people are doing bro.
The fintech company is worth more than Dorsey's other billion dollar baby, Twitter.
Earlier this month Jack Dorsey announced that Square's Cash App, “one of the most widely utilized mobile payment applications in the U.S. market, became the 2nd most popular free mobile application on the Apple App Store.”
Square is not in a bad position to buy some business with that referral fee.
Thirteen months after Dorsey added Bitcoin to his payment platform Square Cash nearly doubled its market valuation over that time to a total of $29 billion while the rest of the U.S. stock market was in a gloomy correction cycle sell off.
Now this is big news. Right?
Pretty impressive. People paid Square a fee through their mobile phones to sell them $50 million worth of Bitcoin in three months. That sure is a sign of the times.
But let's put it in perspective.
Those Are Some Rookie Numbers Dorsey
It took Square all year to move the kind of Bitcoin that Binance moves in a busy day.
According to New York based crypto analytics firm Chain Open Research, Binance total trading volume for one month from November 15 - December 15, 2018 was $20 billion.
Now those are some outstanding numbers.
Jack Dorsey's in a good position to buy some business with that $5 referral fee for referring friends to the Cash App. And at #2 on the Apple App store it's showing. But move over, Jack.
Binance made so much money last year that Binance CEO Changpeng Zhao permanently destroyed $446 million worth of his own cryptocurrency, Binance Coin, as a way of evenly transferring all that value to the holders of the remaining BNB coin.
Trading volume will only increase for Binance in 2019 after the exchange added the option for users to buy cryptocurrency with credit cards.
It's an opportunity Jack Dorsey has decided to pass on.
Binance and Square Cater to Users in Different Stages of Bitcoin Market Adoption
Binance is used to save, invest, and day trade cryptocurrency.
Square is used to make payments.
Binance has catered to the Tech Enthusiasts and Visionaries of the cryptocurrency market adoption curve, the Innovators and Early Adopters.
Square caters to the Pragmatists, the Early Majority.
And whereas Binance provides an easily customizable basket of cryptocurrencies with a wide selection, Square is singularly focused on Bitcoin.
Dorsey has said Cash App will only facilitate bitcoin purchases.
That's in line with his reckoning that bitcoin will become the world reserve currency.
Which would make it an even more distant first among cryptocurrencies for total market value, market share, and transaction volume.
And it's an aggressively deflationary currency.
So if this happens every bit will be insanely valuable compared to BTC's price today and this will fundamentally reorder financial incentives on a personal and global scale.
Bitcoin is resilient. Bitcoin is principled. Bitcoin is native to internet ideals. And it’s a great brand.
— jack 🌍🌏🌎 (@jack) February 5, 2019
We'll know the pragmatic Early Majority are adopting cryptocurrency in full swing when Square gets its numbers in range of the amount of coin moving through Binance's exchange.
How will Cash App Compete?
Lightning makes bitcoin payments fast with ultra low transaction fees.
The Lightning Network reached a peak capacity of $2 million last November. Capacity on L.N. is: "the amount of money that is locked up in smart contracts on the platform, and therefore the amount of funds that can be transacted instantly at any given time."
Cash App is making a play for the Early Majority pragmatists to adopt bitcoin for daily cash payments, and Jack Dorsey's betting that's going to be the fattest part of the fish.