Cash App, a mobile payment service of Square Inc., generated more than $1.63 billion in bitcoin revenue in Q3 2020, which is an increase of more than 1,000% over the same period last year. The company recently invested 1% of its total assets, or $50 million, into bitcoin.
Cash App’s Bitcoin Revenue Soars
Square Inc. released its Q3 2020 earnings report on Thursday. The NYSE-listed (NYSE: SQ) company with a market capitalization of $86 billion provides software and hardware payments products and small business services. Its CEO Jack Dorsey also co-founded Twitter. Square’s flagship mobile payment service, Cash App, launched bitcoin trading in 2018 to enable users to buy and sell BTC. The company wrote:
Cash App generated $1.63 billion of bitcoin revenue and $32 million of bitcoin gross profit during the third quarter of 2020, up approximately 11x and 15x year over year, respectively.
“Bitcoin revenue and gross profit benefited from an increase in bitcoin actives and volume per customer,” the report adds.
Cash App’s bitcoin revenue for the three months ending Sept. 30 this year was $1.63 billion compared to $148 million generated during the same period last year, representing an increase of 11x or about 1,002%. This was a significant improvement from the Q2 performance when the company reported that Cash App’s bitcoin revenue surged 600% and profits rose 711%.
In addition, Square’s bitcoin revenue represents about 54% of the company’s net revenue of $3.03 billion according to its consolidated earnings statement. As a separate segment, Cash App generated $2.07 billion in revenue in Q3, 80% of which were from bitcoin.
The San Francisco-based company explained that it counts “the total sale amount of bitcoin to customers” as bitcoin revenue and the total BTC amount it purchases to facilitate customers’ access to the cryptocurrency as bitcoin costs. Moreover, it applies “a small margin to the market cost of bitcoin” when customers buy the cryptocurrency through Cash App.
Square Inc. recently made a significant investment in bitcoin, putting about 1% of the company’s total assets or about $50 million into the cryptocurrency. Square’s decision to invest in BTC followed another public company, Microstrategy, putting about half a billion dollars into bitcoin and making the cryptocurrency its primary Treasury reserve asset. Square declared:
We invested $50 million in bitcoin as we believe cryptocurrencies are an instrument of economic empowerment and aligns with the company’s purpose. We expect to hold this investment for the long term.
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