Square’s Cash App & Grayscale Combined Consume Over 50% of Bitcoin’s Daily Supply
- Bitcoin continues to be a success for Jack Dorsey’s Square.
- In its first-quarter earnings, Square earned $222 million in non-bitcoin revenue and generated a profit of $178 million.
- The company reported $306 million revenue from bitcoin, surpassing all other revenues on the app.
This is a whopping 367% increase over the same quarter last year at $66 million. Revenue from bitcoin now accounts for 57% of Cash App’s total reported revenue, up from 47% in 2019.
Bitcoin revenue generated a gross profit of $7 million, benefitting from “an increase in transacting active bitcoin customers and growth in customer demand as a result of the decrease in the price of bitcoin,” states the shareholder letter.
Square’s Cash app applies a small margin to the market cost of bitcoin which is evident from the fact that the company only had $7 million gross profit from the $306 million revenue, $299 million being the bitcoin cost.
“Bitcoin cost is the amount the company pays to purchase bitcoin which will fluctuate in line with the price of bitcoin in the market.”
In April, bitcoin volumes were one of the company's segments that “achieved its highest monthly totals.”
The publicly-traded company has generated about $758 million in Bitcoin revenue in the last 12 months.
Square's Bitcoin sales to retail customers skyrocket a jarring 72.3% QoQ to $306.1M in Q1 2020 and 367.1% YoY.
Central bank printing, the halving, and wild price swings have caught the attention of the public as millions and millions are stuck at home with little to do. pic.twitter.com/73XXr14LzE
— light (@LightCrypto) May 6, 2020
Interestingly, Square’s CashApp’s market success came during a period when Bitcoin had one of its worst sell-offs in history, crashing about 50% in the third-largest drop ever in March.
Interestingly, Square and Grayscale, a cryptocurrency asset management, together accounts for 52.56% of all Bitcoin mined in a day in Q1.
— Alistair Milne (@alistairmilne) May 7, 2020
Last month, Grayscale also reported a record quarter first of 2020 with $2.2 billion in assets under management as of March 31, 2020. Its Bitcoin Trust saw record quarterly inflows of $388.9 million.
Now, Grayscale holds 1.7% of all the bitcoin in the world.