- Square’s gross profit from Bitcoin and other cryptocurrencies jumped from $17 million to $55 million.
- Square’s Bitcoin impairment losses stood at $5 million amid a sharp correction in BTC price between May and June.
Jack Dorsey-owned digital payments app Square Cash App recorded a 200 percent surge during the second quarter of 2021. The Square Cash App has been a go-to platform for trading Bitcoin and other digital currencies.
As a result, the company clocked $546 million in Bitcoin services gain, a 94 percent jump year-over-year. Furthermore, in a letter to shareholders on Sunday, August 1, the Square App reported a steep surge in total revenue. The revenue jumped from $875 million to $2.7 billion i.e. a 200 percent rise year-over-year.
At the same time, the gross profit from Bitcoin and other cryptocurrencies jumped from $17 million to $55 million. The company announced that it remains focused on expanding its network utility. The letter to the shareholder mentions:
We remain focused on the health of our network, including attracting and retaining engaged customers. In June, Cash App reached 40 million monthly transacting active customers. With our marketing efforts, we are focused on attracting customers who could use more products and bring greater funds into our ecosystem.
In the second quarter, volume sent through Cash App’s network increased by nearly 4x compared to two years ago, driven by growth in existing customers and newer customers transacting more frequently.
However, Square announced a Bitcoin impairment loss of $45 million on its investment in the world’s largest cryptocurrency. The California-headquartered company purchased $170 million during the first quarter of 2021. This was in addition to its Bitcoin purchases of Q4 2020.
However, in comparison to Q1 2021, Bitcoin’s revenue and gross profit are down 22.3 percent. During Q1, the revenue stood at $3.5 billion. However, the steep correction in Bitcoin price during May and June resulted in a major drop.
Square to acquire Australia-based Afterpay
To expand its footprint in the rapidly emerging FinTech space, the Square Cash App will be acquiring Australia-based Afterpay in all all-stock deals through its common stock offering. The acquisition will allow Square to deliver better financial products and services to its customers. This will also help to drive incremental revenue for merchants of all sizes.
Afterpay has emerged as a very popular ‘buy now, pay later’ (BNPL) platform. This will help Square’s Cash App to expand its strategic priorities for its Seller and Cash App ecosystems. As a result, Square will integrate the Afterpay app into its seller and business units. This will thus allow even the smallest of the merchants to implement BNPL at the checkout. Alyssa Henry, Lead of Square’s Seller business said:
Buy now, pay later has been a powerful growth tool for sellers globally. We are thrilled to not only add this product to our Seller ecosystem, but to do it with a trusted and innovative team.
It is clear that Square is moving ahead with a vision to make a space for itself in the emerging FinTech space. Besides, Jack Dorsey’s strong support for Bitcoin will help the app expand its crypto services in due time.