Square Cash App Bitcoin Profits Doubled in Q2 2018
Despite a market downturn, cryptocurrency is driving business across several industries worldwide. In Q2 2018, Square Cash app reported a 100% increase in profit from its Bitcoin trading transactions over the last quarter.
BTC Fuels New Revenue
Square’s peer-to-peer mobile payment platform, Square Cash reported $37 million in BTC trading revenue in its second-quarter financial statements for 2018.
According to the report, BTC trading has been growing at a rapid pace since Square introduced it to the platform at the start of this year. However, the company’s profits from BTC trading have been marginal due to the significant operational costs of supporting the functionality.
In order to offer users commission-free transactions, Square Cash must directly purchase Bitcoin at varying market prices throughout the year. In Q2 2018, Square Cash incurred ~$36.5 million in operational costs for BTC trading.
Square Cash reported $420,000 profits from BTC trading in Q2 2018.
In the previous quarter, the company reported only $200,000 in profits from BTC trading due to high costs associated with its approval of a New York BitLicense.
On June 18, Square Cash was granted a BitLicense from the New York Department of Financial Services (NYDFS) to facilitate instant buying and selling of the world’s leading cryptocurrency in the state of New York.
NYDFS has only ever granted seven BitLicenses to cryptocurrency-related businesses, including Winklevoss-owned cryptocurrency exchange Gemini.
Square CFO: ‘BTC Not a Major Monetization Engine’
While BTC trading adds a unique and persistent channel of revenue to Square Cash, CFO Sarah Friar believes the product’s growth still lies primarily in its peer-to-peer payment functions.
In an interview with CNBC, Friar addressed the company’s second-quarter BTC trading revenues:
“It’s not a major monetization engine. The goal is to continue to drive utility in the Cash App.”
While profits remain marginal, Square has seen notable growth in BTC trading transactions over the last quarter – reporting a ~9% increase in total sale volume.
Still in its early stages, Square CEO Jack Dorsey said in an interview earlier this year that the company plans to expand its support for cryptocurrency-related functions:
“Bitcoin, for us, is not stopping at buying and selling. We do believe that this is a transformational technology for our industry, and we want to learn as quickly as possible.”
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