In the first quarter of this year itself, the Cash App of Square made a Bitcoin revenue of $3.51 Billion.
Square, a payment company co-founded by Jack Dorsey and which owns the Cash App, released its first-quarter earnings on Friday. The company did a lot of business on the Bitcoin side of things. Cash App makes it easy to buy Bitcoin and Square busts out their Bitcoin revenues every quarter through the Cash App. The first quarter of 2021 saw $3.51 Billion in Bitcoin revenue. This is quite staggering given that in the first quarter of 2020 they made something around $300 million for the entire quarter.
This represents the continued interest among people who have Cash App and other services, who are trying to get their hands on Bitcoin.
Apparently, Bitcoin revenue accounted for 70% of Square’s total revenue for the current quarter. This is huge and makes more than what they were making before they got involved with Bitcoin.
However, one thing to keep in mind is that it was not all roses for the people getting involved in Bitcoin. During Bitcoin’s fluctuations in the market prices in the first quarter, Square actually reported a $20 million impairment loss on its Bitcoin holdings. However, by the quarter’s end, the price bounced back up again. Because of this, they ended up reporting as $472 million fair value of its bitcoin and $272 million greater than its carrying costs.
If the quarter had ended down and Bitcoin would have dropped to under $50,000 that would have been terrible. It would have shown a big loss for them, which probably would not have impressed their shareholders. It is important to keep in mind for people getting into Bitcoin that while there are headlines of things going up there is huge volatility. The volatility is an aspect that could really affect things positively and negatively.
It shall now be interesting to see how the balance sheets of this kind of holder of Bitcoin look like quarter to quarter. Other companies are going to look at it also to see what volatility looks like and how it does as an asset on cooperating treasuries.
Various gains in this sort of things quarter over a quarter will prompt other companies to start piling up on this ever-increasing bandwagon also.
When one talks about Square, there are two different aspects attached to it. There is a Cash App where one can buy Bitcoin and then there is this Square sort of Bitcoin investment as a treasury asset. Square had earlier made a $50 million Bitcoin buy and re-upped that to $170 million bitcoin buy subsequently. Bitcoin is a long-term asset that Square wants to keep on its balance sheet. On the other side, the Bitcoin revenues that they are generating are through the Cash App.