Square Inc.’s mobile payment service Cash App generated more than $1.63 billion in Bitcoin revenue in the third quarter of 2020, an increase of more than 1,000% over the same period last year. The company recently invested 1% of its total assets (that is, $50 million) in Bitcoin.
Cash App’s Bitcoin revenue soars
Square Inc. released its third quarter 2020 earnings report on Thursday. The company is listed on the New York Stock Exchange (NYSE: SQ) with a market capitalization of US$86 billion and provides software and hardware payment products as well as small business services. Its CEO Jack Dorsey (Jack Dorsey) also co-founded Twitter. Square’s flagship mobile payment service Cash App launched Bitcoin transactions in 2018 to enable users to buy and sell BTC. The company wrote:
In the third quarter of 2020, Cash App generated $1.63 billion in Bitcoin revenue and $32 million in Bitcoin gross profit, which were approximately 11 times and 15 times higher than the same period last year.
The report added: “Bitcoin revenue and gross profit benefit from the activity of Bitcoin and the growth in the number of customers per customer,”.
For the three months ended September 30 this year, Cash App’s Bitcoin revenue was US$1,633,764, an increase of 11 times or approximately 1,002% compared to US$148,285 in the same period last year. This is a significant improvement in the performance of the second quarter, when the company reported that Cash App’s Bitcoin revenue soared by 600% and profits increased by 711%.
In addition, according to its consolidated income statement, Square’s Bitcoin revenue accounts for approximately 54% of the company’s net income of $3,033,874. As a separate market segment, Cash App generated $2,068,595 in revenue in the third quarter, 80% of which came from Bitcoin.
The San Francisco-based company explained that it counts the “total amount of bitcoins sold to customers” as bitcoin revenue, and the total amount of BTC purchased to facilitate customer access to the cryptocurrency as bitcoin costs. In addition, when a customer purchases cryptocurrency through the Cash App, it will “bring a small profit to the market cost of Bitcoin.”
Square Inc. recently invested heavily in Bitcoin, investing approximately 1% of the company’s total assets or approximately $50 million in the cryptocurrency. Square’s decision to invest in BTC was after another listed company, Microstrategy. It invested about $1 billion in Bitcoin and used cryptocurrency as its main treasury reserve asset. Party statement:
We invested $50 million in Bitcoin because we believe that cryptocurrency is a tool to enhance economic power and is consistent with the company’s mission. We hope to hold this investment for a long time.
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