Fri. Aug 19th, 2022

Payments startup Square is proving to be a force to be reckoned with in the cryptocurrency market. On Wednesday, the payments startup run by bitcoin bull Jack Dorsey reported its quarterly results, and bitcoin was a shining star. The results shine a spotlight on the simplified way by which Square has made bitcoin accessible to the mainstream via its Cash App, which is increasingly becomes the method of choice for crypto transactions. It also demonstrates Dorsey’s commitment to bitcoin since the company launched its dedicated bitcoin division Square Crypto, which is paying off.

In the fourth quarter, Square facilitated USD 178 million in bitcoin purchases, which brings the company’s 2019 tally to USD 517 million. By way of comparison, Square’s BTC sales have ballooned by nearly 250% since year-end 2018, as pointed out by Messari. The contribution from bitcoin sales has been on the rise without interruption each quarter since Q1 2018. Square’s Q4 bitcoin revenue was USD 52 million. Imagine what the results might look like if BTC were currently in a bull market.

In fact, bitcoin sales on Square’s Cash App are putting major crypto exchanges to shame. According to a report in The Block, Square’s Q4 BTC demand outpaced that of leading U.S.-based crypto exchanges including Coinbase, Gemini and Kraken in the same period, the former two of which suffered declines. The Block points out that Square’s bitcoin volume rivaled that of Binance, whose bitcoin volume hovered at roughly USD 250 million in the same period.

According to Dorsey on the earnings call, in Q4, users of the Cash App were responsible for USD 30-plus in annualized revenue per user, adding that “bitcoin actives [generated] 2-3x annual revenue compared to other cash customers.”

Square’s Cash App recently received a face lift in which it opened up fractional share purchases, giving investors the opportunity to buy part of a stock instead of the whole thing. On average, Cash App users will dole out USD 20 for a partial share of a stock. Square said that the overhaul of the Cash App attracted more bitcoin buyers as well.

Incidentally, Square’s robust bitcoin results come on the heels of a crash in the market in which the bottom has fallen out in the BTC price. After trading as high as USD 10,000 about a week ago, the bitcoin price has plummeted to the USD 8,600 level once again. The leading cryptocurrency is trading at its lowest level in weeks and has given back much of its 2020 gains. Crypto analyst PlanB offered the following guidance in response to the market drop, providing some solace to investors:

  • “2020: btc stays above $8200 – so we are NOT dropping to $6k or $4k levels that others are predicting now.”
  • “May 2020 halving: will be above $10k – 2022: bull run starts after the halving and tops $100k before Dec 2022”

The crypto community cheered Square’s financial results, thanking Dorsey for all he is doing for bitcoin and reveling in the fact that investing in BTC pays off for companies. Dorsey, who is also at the helm of Twitter, recently added the bitcoin emoji to the social media platform.

By Gerelyn