Ark Invest CEO Cathie Wood thinks Cash App is a better bet than Venmo in terms of long-term opportunities. Wood opined that PayPal’s Venmo is merely following the trail set by Cash App and will always play second fiddle.
At Bitcoin 2022, Cathie Wood, CEO of Ark Invest disclosed her preference for Block’s Cash App over PayPal’s Venmo. In an interview with CNBC, Wood announced that the investment firm had sold all its PayPal holdings to fully back Cash App.
“We tend to put our bets with who we believe will be the winners,” Wood said. “As we consolidate our portfolios during a risk-off period, we chose Block over PayPal.”
Her reasons for going all-in on Cash App hinged on the belief that the payment platform had adopted an organic growth model which differs from Venmo’s “top-down” and frantic approach to Bitcoin.
Cash App entered the crypto fray as early as 2018, allowing users to use their balances to buy and sell Bitcoin, Since then, the company had zeroed in by supporting only Bitcoin transactions that accounted for $10 billion in revenue in the last earnings report. In the last quarter of 2021, the number stood at $1.96 billion which translates to a staggering leap of 119%.
Cash App leverages the Lightning Network that allows faster, energy-efficient, and cheaper transactions for its users. The platform’s parent company, Square, changed its name to Block as a signal of its intent to narrow its focus on blockchain technology. Block’s CEO Jack Dorsey stepped down from Twitter’s board in what has been described as staving off all distractions to go all-in with Bitcoin.
Block is Ark Invest’s sixth-biggest holding with the fund holding around 1% of the company. Ark Invest had steadily increased its holdings in Block with a significant purchase of 225,937 shares in July 2021 after Dorsey announced a new division with a “primary focus on Bitcoin.”
PayPal and Venmo chasing behind
PayPal’s Venmo launched Bitcoin services in April 2021, also allowing a handful of cryptocurrencies like Litecoin, Ethereum, and Bitcoin Cash on the platform. Users could buy, hold and sell cryptocurrencies on the platform in a move that sent Bitcoin on one of the strongest rallies of the year.
“Our goal is to provide our customers with an easy-to-use platform that simplifies the process of buying and selling cryptocurrencies and demystifies some of the common questions and misconceptions that consumers may have,” said Darrell Esch, Venmo’s senior vice president.
Despite the moves, Ark Invest dumped its PayPal holdings and openly backed its competitor, Block. This declaration might have the effect of dampening moods as PayPal has previously taken steps to improve its cryptocurrency offerings. At the end of the interview, Wood even expressed the belief that at some time in the future, PayPal might end up scoring significant wins.
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Source: https://beincrypto.com/ark-invest-ceo-wagers-cash-app-paypals-venmo-long-run/