- Despite the growth in gross profits that Square has presented thanks to the commercialization of Bitcoin, the firm does not intend to add new cryptos and only focus on BTC.
- The company is working on developing other products and features that are related to Bitcoin, beyond the purchase and sale that they currently offer.
Last week Square Inc. published his earnings report and losses during the third quarter reporting a 60% increase in gross profit, driven essentially by Bitcoin.
Despite experiencing an increase in gross profit, Square reported revenue lower than what the market expected for the quarterAs a result, the company’s shares fell significantly last Friday.
Specifically Cash App, its P2P payment application, generated $ 1.8 billion in Bitcoin revenue, experiencing an 11% increase over the previous year. Thus, during the past quarter, Bitcoin sales revenue accounted for 47% of Square’s total sales.
Square reports decrease in revenue
However, when we compare it with the second quarter of this year, the numbers are less encouraging. In particular, the revenue and gross profit of Bitcoin decreased considerably. In fact, analysts surveyed by Bloomberg estimated that the Cash App would generate $ 2.47 billion in Bitcoin.
The sale of Bitcoin generated only 3.7% of the company’s gross profit during the third quarter.
One very relevant aspect is that Bitcoin revenue can be a misleading metric, particularly as it relies on price volatility. It is in this way that we must look at the gross profit of Bitcoin, which represents the money that Square collects through transaction fees.
So that, Although Bitcoin is not a significant driver of earnings today, it has played a key role in the growth of users on Cash App, reporting an increase in transactions processed in the Cash App.
Will they continue to expand in the crypto world?
Square’s CFO Amrita Ahuja said The company is working on developing other products and features that are related to Bitcoin, beyond the simple purchase and sale that they currently offer.
However, when asked if Square was planning to add new cryptocurrencies to its offering, Square CEO Jack Dorsey firmly said no since they are currently focused on Bitcoin.
“Our goal is to help Bitcoin become the native currency of the Internett, ”Dorsey assured.
In fact, with this objective in mind, the company is working on various initiatives. Among them the construction of a Hardware wallet and the exploration of Bitcoin mining.
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