Payments company Square has reported a record amount of earnings in quarterly Bitcoin revenue, reports CoinTelegraph.
The publicly listed payments group, the third quarter of 2020, wrote in its investor letter released on Thursday at the market closing, “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,”
Square Bitcoin Revenue Historic as a Quarterly Focus
In contrast, the publicly listed payment firm sold $875 million in its Cash App in the second quarter of 2020, and its profit was $17 million. For the whole year of 2019 Square sold $516 million of Bitcoins.
But in Q3 Square went a step better than merely having Bitcoin usable in the accounts of consumers.
Square announced in its shareholder message, in October, that it had purchased $50 million of bitcoin as a treasury fund. At the time, the price of Bitcoin was $11,000. Since then, Bitcoin broke $15,000.
Dorsey announced that “an expenditure of $50 million in bitcoin,” which he hopes “would be the internet’s native currency and help citizens flourish around the world.”
From a product, leadership, and legal innovation standpoint, Square previously invested in Bitcoin, and recently attached this financial contribution. In 2018, the company launched bitcoin trading with the Cash App, which allows bitcoin to be bought and sold.
The company formed Square Crypto in 2019, an independent team focused solely on contributing to the benefit of all bitcoin open-source work, and recently launched the Cryptocurrency Open Patent Alliance (COPA), a non-profit organization that promotes crypto innovation and opens access to patented crypto inventions.
It can be pointed out that Square led the way in building Bitcoin adoption across publicly trading companies. It first piloted Bitcoin payments in its Cash App at the end of 2017.
PayPal’s move towards adding cryptocurrency to their services might have been pre-empted by key competitor Square.
A Slim Margin for Bitcoin Profits
Yet, for a money management provider, Square’s bitcoin industry has comparatively tame revenues, with operating margins shy of 2 percent.
The Cash App revenue in terms of fiat payments has provided higher profits compared to its Bitcoin component. According to its shareholder report, the firm produced $1.2 billion in sales in the second quarter and $281 million in gross profit for regular fiat payments.
In Q12020, Square produced $306 million in sales of Bitcoin in its Cash App. In Q2, it produced revenues of $875 million. However, Square still has a very slim margin for Bitcoin transactions.
Bitcoin revenues in the Cash App receive a little less than a 2% margin in contrast to the traditional payment operations of Square.
Square in a Nutshell
Square, Inc. is a San Francisco, California-based American financial services, merchant service aggregator, and mobile payment firm. The firm markets goods for software and hardware payments and has grown into offerings for small companies.
Created by Jack Dorsey and Jim McKelvey in 2009, the organization released its first software and service in 2010. After November 2015, it has been classified as a public corporation with the ticker symbol SQ.
The firm announced $4.7 billion in revenues in 2019. The business has branches in the United States , Canada , Australia, Japan and the UK.
