The American-based payment company Square Inc. reported a drop in Bitcoin revenue month over month from its Cash App during the third quarter of 2021, the total amount being $1.82, overall, 11% up from last year.
Square has found profit in midst of the pandemic as many users grew to need e-commerce services. The number of processed transactions on the app during the third quarter went up 27% with a total amount of $3.7 billion.
The company is led by Jack Dorsey, who also runs Twitter and is a big BTC enthusiast, currently aiming to invest in the future of decentralization and new economic systems.
Square’s third quarter of 2021 had total net revenue of $3.84 billion, 27% up from last year; $2.03 billion excluding BTC. Its gross profit went up 43% year over year with $1.13 billion. The revenue from transactions was $1.30 billion, up 40% since 2020.
However, bitcoin revenue and gross profit dropped compared to the second quarter. The company stated the decrease is due to the “relative stability in the price of bitcoin”.
In the third quarter of 2021, we recognized a loss of $7 million driven by the adjustment to the revaluation of equity investments as well as a $6 million bitcoin impairment.
Bloomberg reported what Chief Financial Officer Amrita Ahuja at Square shared with them:
Bitcoin transactions through Cash App have grown tremendously over the past two years, but Bitcoin revenue can be a deceiving metric. Square reports all Bitcoin sales as revenue, which is why that number can look very large and is dependent on things like price volatility. Bitcoin gross profit, though, represents the money Square collects via fees from Bitcoin transactions, and is a better reflection of that part of Square’s business.
After the Q3 earnings letter’s release, the company’s dropped 4.9% in post-market trading.
The Focus Is On Bitcoin (And International Waters)
Square’s earnings letter highlighted their agreement to acquire the Afterpay platform “with more than 16 million consumers and approximately 100,000 merchants as of June 2021.”
Through this transaction, we plan to unite two complementary businesses with a shared focus on economic empowerment and financial inclusion. We believe the combination will more deeply connect our Seller and Cash App ecosystems, accelerate our strategic priorities, and allow us to deliver even more compelling products and services for consumers and merchants.
The report also sheds light on other projects and partnerships, such as the Cash App’s new offer to teenagers, an important expansion of its demographics, and the SoFi Stadium partnership.
We believe our partnership with SoFi Stadium serves as a testament to how we are now equipped to enable unique commerce experiences and support the needs of complex multi-purpose venue sellers.
The App is currently focusing on expanding and offering accessible and flexible commerce products to all. Results show “an increased adoption of contactless payment options due to the pandemic.”
The company explained their focus remains on their “international strategy of achieving product parity globally, investing further into brand awareness, and launching in new markets”.
Square stated they are focusing on BTC rather than bringing other cryptocurrencies into the Cash App. Earlier, Dorsey had tweeted about Square’s intention in building an energy-efficient and more accessible BTC mining system.
“Square is considering building a Bitcoin mining system based on custom silicon and open source for individuals and businesses worldwide,”
Related Reading | Jack Dorsey: Square Could Build Bitcoin Mining System