By CultureBanx Team
- Cash App is now worth $40B
- About 200 hip-hop artists name-check Cash App in their lyrics
Cash App, your rapper’s favorite smartphone-based payments and money transfer service owned by Square (SQ -3.79%) is now worth $40 billion. About 200 hip-hop artists name-check Cash App in their lyrics, according to music database Genius. Being culturally attuned paired with cryptocurrencies and stimulus checks all helped to create the country’s fourth largest consumer application in the U.S.
Why This Matters: Rappers have been using the fin-tech platform as a way to engage with fans for a while now. So it’s easy to see how hip-hop influencers and their loyal followers grew Cash App’s monthly active users from seven million in 2017, to 30 million in 2020. In turn, these users also gained the attention of those in search of higher-end services like Bitcoin and general investing.
Hip-hop influencers and their loyal followers grew Cash App’s monthly active users from seven million in 2017, to 30 million in 2020
First created back in 2013, Cash App’s valuation is almost two-thirds of Square’s current $65 billion market value. Since hitting a pandemic low in March, Cash App’s parent company has seen its share price nearly quadruple. Even with the 1.5% fee the company charges users to to transfer funds to a bank account.
There are 63 million U.S. adults left behind by banks, and these are the customers Cash App is directly targeting through its once-a-week giveaway, called Cash App Friday, where it distributes cash digitally to some users who request it. During a time where 40% of Americans would struggle with a surprise $400 expense this has also helped increase it’s monthly active users. Trapital noted that in January of this year Cardi B and Megan Thee Stallion gave 2,000 random Tweeters $500 apiece for a total of $1 million via the app. In 2019, Cash App gave away $60,000 on its namesake Friday.
Situational Awareness: Cryptocurrencies especially Bitcoin also played a major role in getting the company to a $40 market cap. It was back in 2017 when Cash App introduced the ability to trade Bitcoin, prior to the cryptocurrency’s peak valuation. Bitcoin accounts for about half of Cash App’s revenue, according to Coindesk. Excluding Bitcoin sales, the app’s revenue hit $325 million in Q2 of this year. ARK research that Square benefited from an influx of money (including stimulus checks) into the Cash App. Some investors are concerned that the one-time nature of the government stimulus makes Cash App’s current growth rate a little skeptical.
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