Merchant services aggregator and mobile payments company Square Inc. (SQ) has seen it shares spike this week on an upbeat note from one team of analysts on the Street who claim that its Cash App is growing faster than PayPal Holding Inc.'s (PYPLpeer-to-peer (P2P) payment app Venmo. Bulls at Nomura Instinet expect Square Cash's momentum to persist, attributing part of the strength to the introduction of cryptocurrency trading on its platform. (See also: What Is Square, Inc?)

According to a Nomura analysis, since early 2016, Square Cash app downloads have averaged a 128% year-over-year (YOY) growth rate each month, compared to Venmo's 74% average YOY return over the same period. Nomura's Dan Dolev wrote a note to clients Wednesday, indicating that while Venmo has historically seen more downloads than Square, "the gap appears to have peaked in July 2017." Square Cash has been downloaded some 28 million times, just 1 million shy of Venmo's level, according to the analyst. 

As Square Cash rolls out bitcoin trading in most states, the Nomura analyst wrote that "its growth versus the popular Coinbase app is noteworthy." While Coinbase saw its growth peak in late 2017, in line with bitcoin's all-time highs, its growth has slowed since the holiday period, "whereas Square Cash App experienced more balanced growth," noted Dolev.

Square's Cash Attracts Crypto Traders, Unbanked, Underbanked 

Dolev expects SQ stock to gain nearly 14% over 12 months to reach $65. Trading up about 0.9% on Thursday morning at $57.09, SQ reflects a 64.7% increase year-to-date (YTD) and a whopping 192.1% surge over 12 months, compared to the S&P 500's 1.9% return and 15.6% incline over the same respective periods. 

At the Consensus blockchain conference on Wednesday, Square Chief Executive Officer Jack Dorsey told attendees that the core demographic for its Cash App has been unbanked and underbanked consumers, as reported by Fast Company. "It was not a stated goal initially, but it's something we want to lean into," said Dorsey, who is also the CEO of social media giant Twitter Inc. (TWTR). He indicated that the company is encouraged by its users' growing loyalty to the app, and that the most popular merchants on the platform are Walmart Inc. (WMT) and McDonald's Corp. (MCD).

“This is everyday usage,” said Dorsey. “We have evidence to show that people are using this as their primary spending device and primary banking account, and in some cases their only banking account.” (See also: 6 Fast-Growth Stocks That Can Shine.)