Block (XYZ +1.59%) operates two successful ecosystems that each serve different customers with unique payment and financial services offerings. Cash App focuses on individual consumers. And Square targets small businesses.
This fintech stock trades 77% below its all-time high from August 2021 (as of Jan. 15). But I think it could turn $1,000 into $20,000 in 20 years.
Image source: Block.
Block's focus on Bitcoin is obvious
As an innovative and forward-thinking business led by Jack Dorsey, it might not come as a surprise that Block is working on various Bitcoin projects. Cash App started allowing Bitcoin trading in 2018. Block sells Bitkey, a Bitcoin hardware wallet. And the company's Proto segment sells Bitcoin mining equipment.
Most recently, Square enabled its customers to accept payment in Bitcoin. This division counts 4 million merchants in total, so there is already huge potential should this feature catch on.
NYSE: XYZ
Key Data Points
Greater adoption can be a boon
Michael Saylor, billionaire founder and chairman of Strategy, believes that Bitcoin's price will rise 217-fold over the next two decades to $21 million per unit. Assuming Block's Bitcoin initiatives find remarkable success, one can assume that the stock can benefit from a gain that's about one-tenth (20-fold) of the dominant digital asset's forecasted rise.
This sort of upside calculation might not be well-received by more critical observers. However, investors who are bullish on Bitcoin's long-term potential, as well as Block's ability to capture value from greater adoption of related products and services, might view this as a more probable outcome.
