Cash App, a mobile payment service from Square Inc., generated more than $ 1.63 billion in bitcoin revenue in Q3 2020, an increase of more than 1,000% from the same period last year. The company recently invested 1% of its total assets, or $ 50 million, in bitcoin.
Cash App’s Bitcoin sales are on the rise
Square Inc. published its earnings report for the third quarter of 2020 on Thursday. The NYSE-listed (NYSE: SQ) company with a market capitalization of $ 86 billion provides software and hardware payment products and services for small businesses. The CEO Jack Dorsey was also a co-founder of 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 in bitcoin revenue and $ 32 million in bitcoin gross profit in the third quarter of 2020, approximately 11x and 15x higher, respectively, from a year earlier.
“Bitcoin revenue and gross profit benefited from an increase in active bitcoin and volume per customer,” the report adds.
Cash App’s bitcoin sales for the three months ended September 30 this year were $ 1,633,764, compared to $ 148,285 generated in the same period last year, representing an increase of 11x or about 1,002%. This was a significant one improvement of the Q2 performance when the company reported that Cash App’s bitcoin earnings were up 600% and profits were up 711%.
Additionally, Square’s bitcoin earnings represent about 54% of the company’s net revenues of $ 3,033,874, according to the consolidated earnings statement. As a separate 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 bitcoin sales to customers’ as bitcoin revenue and the total BTC amount it buys to facilitate customers’ access to the cryptocurrency as a bitcoin fee. In addition, it applies “a small margin on bitcoin’s market cost” when customers purchase the cryptocurrency through the Cash App.
Square Inc. recently has 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, which put about half a billion dollars into bitcoin and its cryptocurrency primary treasury reserve Business asset. Square stated:
We have invested $ 50 million in bitcoin because we believe that cryptocurrencies are an instrument of economic empowerment and align with the company’s purpose. We expect to hold onto this investment for the long term.
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