Square, the U.S-listed fintech company, disclosed that its fast-growing payment app software Cash App is now its major income driver, making up about 80% of its entire revenue in Q3 with the help of Bitcoin.
What we know
In Square’s Q3 earning result, Cash App’s Bitcoin-derived revenue of $1.63 billion in BTC marked a massive increase of more than 1,100%, when compared to the same period in 2019.
Bitcoin revenue was by far the largest component of Cash App’s overall revenue generation of $2 billion, with all other revenue streams totaling $453 million, or 22% of the total.
BTC revenue minted $32 million in gross profit for Q3, an increase of 15 times the previous year’s profit of $2.1 million in the same period.
What you should know
Cash App works as a broker for BTC purchases, which it buys on behalf of the consumer in need; hence, it earns a commission from such transactions.
The company also spoke on the positive impact that cryptos would be having on its business in the long term.
“In October 2020, we invested $50 million in bitcoin as we believe cryptocurrencies are an instrument of economic empowerment and align 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.”
Recall Nairametrics about a month ago, broke the news on how Square, Inc. (NYSE: SQ) led by Twitter’s Jack Dorsey on October 8th disclosed that it purchased, 4,709 bitcoins at an estimated worth of $50 million.
Square added that it invested in cryptos because it saw it as a tool for economic enhancement via participation in the future of payment systems, which aligns with Square’s objectives.
The investment represents approximately one percent of Square’s total assets as of the end of the second quarter of 2020.
“We believe that bitcoin has the potential to be a more ubiquitous currency in the future,” said Square’s Chief Financial Officer, Amrita Ahuja.
Square, Inc. (NYSE: SQ) builds tools to empower businesses and individuals to participate in the economy.
Sellers use Square to reach buyers online and in person, manage their businesses, and access financing. Individuals use Cash App to spend, send, store, and invest money.
Square has offices in the United States, Canada, Japan, Australia, Ireland, Spain, and the UK.