Square Buys More Bitcoin As Cash App Revenues Swell 785%

Payment giant Square, Inc. announced that it had purchased another $ 170 million worth of Bitcoin (BTC) as a reserve asset.

“The Internet needs a native currency, and we believe Bitcoin is it,” said Jack Dorsey, a longtime bitcoin enthusiast, promising to “double down” the firm’s commitment to the world’s largest cryptocurrency.

The San Francisco-based company Square contributed to the mainstream adoption of the leading cryptocurrency by purchasing an additional 3,318 BTC in the fourth quarter. According to the press release, the firm added 3,318 BTC to its treasury for $ 170 million. This means that in its last purchase, Square paid $ 51,235.70 per Bitcoin (BTC).

Unfortunately, Bitcoin recently hit a low of $ 44,964.49 shortly after scoring a record high of over $ 58,000. At the time of the firm announcement, the price of Bitcoin was below $ 48,000. That means the 3,318 BTC Square bought was then worth less than $ 160 million.

Square Cash App BTC Revenue Increased by 785%

According to Square’s report to the SEC, the company generated $ 4.57 billion in BTC revenue in 2020, of which $ 97 million went to the company as gross profit. This is 785% more revenue from bitcoin year-over-year.

The San Francisco payments giant reported Tuesday that revenue generated by selling Bitcoin on the Cash App contributed to “48% of total consolidated revenue in 2020, and 85% of the total increase in consolidated net revenues in 2020.” The company also added that more than a million Cash App users purchased Bitcoin for the first time in January alone, while more than 3 million people bought or sold Bitcoin on the app in 2020.

“The increase was due to the market price of bitcoin, growth in the number of active bitcoin customers, as well as volume per customer. The amount of bitcoin revenue recognized will fluctuate depending on customer demand as well as changes in the market price of bitcoin.”

The growing interest in trading among Cash App users has led Square, Inc to purchase an additional $170 million of BTC in the fourth quarter.

The company also had bought 4,709 BTC worth $ 50 million last October. That investment is currently worth $ 224 million, and the company has a total of $ 394 million in Bitcoin in its treasury. The amount the company spends on Bitcoin is only 5% of its total liquid assets.