Customer Demand Sees Square Buying 598% More Bitcoin in Q2 2020
As Q2 ends, the financial report for the quarter ending July 30 comes flowing in with “strong growth” as a common theme.
Now, Twitter founder and bitcoin supporter Jack Dorsey’s Square has released its Q2 report that revealed the Cash App recorded an increase of 186% in its bitcoin volume. In comparison, during the same period, BTC price appreciated 25%.
In the second quarter of 2020, the company's gross profit was $597 million, which was up 28% YoY, while total net revenue was up 64% You at $1.92 billion.
The growth in revenue was the result of an increase in business accounts using Cash App, which generated $271 million, up 129% YoY, of subscription and services-based revenue.
“Growth was driven primarily by Instant Deposit volumes, and Cash Card spend,” it states.
Bitcoin revenue accounted for $875 million and generated $17 million in bitcoin gross profit during the second quarter of 2020, up 600% and 711% year over year, respectively.
Square’s bitcoin revenue in Q2 2020 was almost 3x of Q1 2020 and 25x of Q1 2018 when bitcoin buying first went live on Cash app — an app that has over 30 million monthly transacting active customers.
“Bitcoin revenue and gross profit benefited from an increase in bitcoin actives and growth in customer demand,” reads the report.
Interestingly, Square’s bitcoin revenue involves “the total sale amount of bitcoin to customers,” and bitcoin costs are the total amount of BTC that Square purchases.
As such, in 2Q20, Square purchased $858,041 worth of BTC, up 598% from the three months ended in June 2019 at $122,938. During this period, 118,800 BTC were generated (1800 BTC per day till May 11 and 900 BTC per day after that).
Moving in Q3, July has been even more of a success for the company as it “delivered strong revenue and gross profit growth year over year.” Compared to June, they are seeing MoM increases in volume per transacting active Cash App customer across peer-to-peer payments, Cash Card, and bitcoin investing.
This growth may be partially driven by government stimulus and unemployment benefits, reads the shareholder letter. As such, it “may not sustain at the same levels during the remainder of the third quarter.”