Square’s Cash App bitcoin sales revenue has increased by nearly 11x year-over-year in Q1 2021, according to a shareholder letter it recently released.
The app recorded a profit of $964 million overall in Q1 this year, compared to $539 million last year, which represents a growth of 79%.
Bitcoin revenue was $75 million, approximately 2% of the bitcoin revenue generated. Square uses bitcoin gross profit as a metric to measure performance, saying,
“When customers buy bitcoin through Cash App, we only apply a small margin to the market cost of bitcoin, which tends to be volatile and outside our control. Therefore, we believe bitcoin gross profit better reflects the economic benefits as well as our performance from these transactions.”
The $964 million means that Square sold nearly $1 billion worth of BTC during this quarter, a staggering sum. It notes that revenue may fluctuate as a result of market volatility or changes in customer demand.
It also references the BTC investments that Square itself has made, which total to $220 million. In the first quarter, it recorded a loss of $20 million on its investment. As of March 31, 2021, its fair value investment of BTC was $472 million, $272 million greater than its carrying value.
Square’s doubling down on BTC paying off
Square CEO Jack Dorsey has been an ardent supporter of bitcoin for a long time. The addition of BTC services on the Cash App has paid off handsomely for the company. Last year, its bitcoin sales became a dominant source of revenue.
Square’s investment in BTC has also helped to fuel the current market bull run. Alongside the likes of MicroStrategy, the company’s investments into the crypto have helped add legitimacy to the asset class.
The Square app is highly popular in the west and grants users a convenient way to enter the market. However, there is some competition brewing with the likes of PayPal, and soon Visa, also entering the market.