- According to Square, its BTC gross profits grew 15x year over year to hit £24.38 billion.
- The firm’s BTC revenue in the whole of 2019 was £393.1 million.
- Per Square, this growth is a result of increased BTC activities from its customers.
Square, a payments company, has unveiled that its Cash App raked in more than £1.24 billion of bitcoin (BTC) revenue in Q3. The firm unveiled this news on November 5 through its Q3 2020 report noting that it recorded £24.38 million of BTC gross profit during the quarter. Reportedly, these figures represent growths of approximately 11x and 15x year over year, respectively. The firm went on to note that BTC revenue and gross profit benefited from an increase in BTC activities and volume per customer.
Reportedly, this marked the first time in history for the firm to hit the £1 billion mark regarding BTC sales. For comparison purposes, the organization reportedly sold £666.9 million in BTC through its Cash App in Q2 this year. The total profits during this period were £12.6 million. In Q1 this year, the company’s BTC sales through its Cash App brought in £232.7 million. In the past year, the publicly traded payments company sold £393.1 million in BTC.
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This massive growth in BTC revenue and profits comes after Square transformed how it supports its BTC business in November 2019. The company shifted to a fee-based model, aiming to improve transparency. Under the new model, the firm charges users 1.76% for purchasing BTC, which is a fairly thin profit margin compared to Square’s overall business, which has higher margins. Before this change, the company used to bake the fees into the spread.
Spearheading BTC adoption among payments-focused firms
Among publicly-traded payments-focused companies, Square has spearheaded the integration of BTC services into its portfolio. The company pilot BTC purchases in its Cash App in November 2017. In contrast, PayPal confirmed that it had indeed added support for BTC, BCH, ETH, and LTC in the past month. Apart from dabbling into the crypto sector before other payments firms, Square also went a step further in Q3 this year by adding BTC to its balance sheet instead of simply availing it to its customers.
In the report, Square CEO, Jack Dorsey said,
“In October 2020, 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. The accounting rules for bitcoin will require us to recognize any decreases in market price below cost as an impairment charge, with no upward revisions when the market price increases until a sale.”