According to Square, BTC’s gross profit grew 15 times year-on-year to £24.38 billion.
The company’s BTC revenues for the full year 2019 were £393.1 million sterling.
According to Square, this growth is the result of increased BTC activity by its customers.
Square, a payment company, has announced that its cash app generated over £1.24 billion in Bitcoin (BTC) revenue in the third quarter. The company unveiled this news on November 5th in its Q3 2020 report, which stated that it recorded gross BTC earnings of £24.38 million during the quarter. These figures are reported to represent growth of approximately 11x and 15x year-on-year respectively. The Company further noted that BTC sales and gross profit benefited from an increase in BTC activity and volume per customer.
The company reportedly achieved the £1 billion mark in BTC sales for the first time in its history. For comparison, the company reportedly sold £666.9 million in BTC through its Cash App in the second quarter of this year. The total profit for the period was £12.6 million. In the first quarter of this year, the company’s BTC sales via its cash app generated £232.7 million. Last year the listed cash company sold £393.1 million of BTC sales.
This massive growth in BTC sales and profits is due to Square changing the way it supports its BTC business in November 2019. The company switched to a fee-based model to improve transparency. Under the new model, the company charges users 1.76% for the purchase of BTC, which is a rather thin profit margin compared to Square’s overall business, which has higher profit margins. Before this change, the company baked the fees into the margin.
Pioneer in introducing BTC to payment-oriented companies
Among publicly traded companies that focus on payment transactions, Square has taken a pioneering role in integrating BTC services into its portfolio. The company is piloting BTC purchases in its Cash App in November 2017, while PayPal confirmed that it actually added support for BTC, BCH, ETH and LTC last month. Aside from trying its best in the crypto sector ahead of other payment companies, Square also went a step further in the third quarter of this year by adding BTC to its balance sheet rather than simply making it available to its customers.
In the report, Square’s CEO, Jack Dorsey, said
“In October 2020, we invested $50 million in Bitcoin because we believe that crypto-currencies are a tool for economic strengthening and are in line with the company’s purpose. We expect to maintain this investment in the long term. The accounting rules for Bitcoin will require us to record any decline in the market price below cost as an impairment charge, with no upward adjustment if the market price rises to a sale”.