When Swissquote Group Holding SA became the first European bank to let customers trade Bitcoin in 2017, the price of one Bitcoin was about $2,000.
Since then, Swissquote’s shares have jumped more than 1,500%, thanks to the growing demand for digital currencies and Bitcoin rising above $100,000.
However, being tied closely to crypto also brings ups and downs, so Swissquote wants people to know that the company offers much more than just crypto services.
“We definitely don’t see ourselves as a Bitcoin stock,” co-founder and chief executive officer Marc Buerki said in an interview. Still, “it’s possible that certain investors look at us primarily through our crypto business,” acknowledged Buerki, who launched the platform with fellow engineer Paolo Buzzi in 1996 and is still Swissquote’s largest shareholder.
Buerki is looking to transform Swissquote from an online trading firm into a more complete financial services platform. “That includes becoming the first banking address for clients, rather than just another account for trading,” he said, adding that the company could even be an alternative to the likes of UBS Group AG.
Crypto makes up less than 15% of Swissquote’s total revenue. Most of the company’s income comes from interest, fees, and trading in currencies and other types of assets, according to company reports.
Still, the company’s link to crypto has boosted its stock. In 2024, Swissquote’s shares were among the best-performing in Europe, rising by 70%, and they’ve already gone up another 29% this year.
Martin Lehmann, a fund manager at 3V Asset Management in Zurich, who owns Swissquote shares, said the company has “a good mix of ways to make money.” He added that it can count on strong income from trading or from interest earned on money that hasn’t been invested.
Still, “it will be the first Swiss firm to pop up in investors’ minds looking to get some crypto exposure,” and to get away from that won’t be easy, he said.
Swissquote’s rising share price has increased its market value to 6.9 billion Swiss francs ($8.3 billion), making it worth more than EFG International AG and Vontobel Holding AG.
These two banks are some of the bigger private banks in Switzerland, and each manages more than twice the 76.3 billion Swiss francs in assets that Swissquote handles.
The rise in Swissquote’s shares has pushed their price above what most analysts expected, which could make it harder for the stock to go up much more.
At the start of 2024, all analysts tracked by Bloomberg had a “buy” rating on Swissquote’s stock. Now, most of them rate it as “hold” or “sell.”
The average 12-month price target for the stock is 386 Swiss francs, which means analysts expect the price to fall about 14% from where it is now.
Swissquote’s full-year results showed growth in both revenue and the number of customer accounts, thanks to strong interest in crypto during 2024, according to UBS analysts led by Haley Tam.
However, they also said they don’t believe the boost from crypto will last, either in trading or in attracting new customers, and they lowered their price target for the stock.
Swissquote’s stock is priced at 20 times its expected earnings over the next year, which is lower than U.S. companies like Robinhood at 38 times and Coinbase at 29 times.
UBS analyst Haley Tam says this lower price makes sense because new competitors in Europe could affect Swissquote’s market share and trading volumes in the long run.
“Thanks to the scalability of its platform, Swissquote should see a disproportionate increase in profits,” said Zuercher Kantonalbank analyst Daniel Regli, who rates the stock outperform.
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