Square Cash App’s Bitcoin Sales Doubles in Q3, Eating Twice the Amount of BTC Produced

Square’s Cash App gross profit was $385 million in the third quarter, up 212% since the last year, while the revenue in the quarter more than doubled to $3.03 billion, beating the expectations.

But it was Bitcoin that was the star as the company generated $1.63 billion of revenue from the digital currency, up 11x year over year. $32 million was reported in bitcoin gross profit in the third quarter of 2020.

“Bitcoin revenue and gross profit benefited from an increase in bitcoin activities and volume per customer,” reads the Shareholder Letter.

Revenue from Bitcoin was the largest compared to Cash App’s other revenue stream totaled at $453 million, just about 22% of the total revenue of $2 billion.

As a matter of fact, Square has been gobbling up twice as much as the bitcoin has been mined. With Grayscale already gobbling more than what has been generated and PayPal also coming in, the supply crisis is here.

The call earnings that revealed third-quarter profit beating estimates had Square Inc. shares rising by 7%.

The company saw its gross payments volumes rebounding in the third quarter, after declining earlier in the year due to small businesses forced to close down because of coronavirus restrictions.

In Q3, a total of $31.7 billion in payments were processed, up 12% from a year ago. “We have seen strong growth in our online channels, and we saw that continue into October as well,” said Square chief financial officer Amrita Ahuja.

Related: Customer Demand Sees Square Buying 598% More BTC in Q2 2020

However, Square’s lending business struggled to recover, still down 72% from last year. But of course, the company is optimistic, with the stock rising more than 178% since the start of the year and Bitcoin rallying.

Square CEO Jack Dorsey also talked about the $50 million investment made into Bitcoin last quarter during the earnings call – a strategic investment towards its purpose of “economic empowerment and commitment to financial inclusion.”

“We believe (Bitcoin) will be the native currency of the Internet and help people around the world better participate and thrive in the economy.”

Dorsey said, “We expect to hold this investment for the long term.”

This quarter, the company launched Auto-Invest for dollar-cost averaging – the recurring daily or weekly purchase of bitcoin and stock. Square further wishes to continue to add “more force” behind the crypto trend, specifically Bitcoin.

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