Square Earned $200,000 From Bitcoin Trading, Without Charging Fees

  • Square's Cash app started letting users buy and sell bitcoin back in January. Since then, the company earned $200,000 in profit from trading.
  • The Cash app doesn't charge any fees, and made money thanks to the cryptocurrency's price fluctuations.

Square’s Cash app jumped on the Bitcoin bandwagon back in January this year, when it started letting users buy, sell, and hodl Bitcoin in the app. The company recently unveiled its first quarter results, which show the cryptocurrency brought the company $200,000 in profit.

The Cash app earned the company the funds without charging fees, as Square charges none to trade Bitcoin. The cryptocurrency’s price fluctuations, as Markets Insider notes, essentially helped Square sell $34.1 million worth of BTC, at a cost of $33.9 million.

Square founder and CEO Jack Dorsey, who’s also in charge of Twitter, is a well-known Bitcoiner. As covered, Dorsey revealed he believes Bitcoin will become the world’s “single currency” by 2028. Per his words, Bitcoin is a “transformational technology.”

According to Markets Insider, Nomura Instinet analyst Dan Dolev commented on Square’s Bitcoin earnings, saying:

"If they actually charged a fee as some of their competitors do, that number would be much higher. They're just basically testing out, allowing people who don't normally trade Bitcoin to trade Bitcoin."

Dan Dolev

Notably, the company isn’t depending on Bitcoin for a large portion of its revenues, but Dolev revealed its popularity showed potential. Per his own research, 60 percent of Square merchants are willing to accept Bitcoin as a payment method. As such, the company could in the future charge fees, once cryptocurrencies are used in day-to-day transactions.

Moreover, adding Bitcoin to the Cash App likely spurred downloads and brought Square new users, Dolev noted. In this year’s first quarter, the app had 7 million monthly active users, and remained one of the top 25 apps in Apple’s App store.

Per Dolev, while Bitcoin has the potential to help Square improve, the company doesn’t depend on the cryptocurrency. According to him, even if it dropped to zero, Square would still be successful.

When it comes to Bitcoin trading, Square currently faces competition from Coinbase, which reached over $1 billion in revenue last year, and Robinhood, a popular mobile stock trading app that recently introduced cryptocurrencies to its services.

Crypto at CES 2020: Libra Association Exec Says Bitcoin Is Not ‘A Means of Payment’

On Tuesday (January 7), in Las Vegas, Dante Disparte, the vice chairman of the Libra Association, rejected the idea of Bitcoin being used as a means of payment.

The Libra Association executive's comments while speaking as part of "The Libra Effect" panel session at "Digital Money Forum: Fintech, Crypto and Blockchain", which is part of this year's Consumer Electronics Show (CES) in Las Vegas.

The other speakers at this panel were Michael Casey, Incoming Chief Content Officer at CoinDesk, Amy James, CEO at Alexandria Labs, Andrew B. Morris, Founder and CEO at The Fintech Agenda LLC, Robin Raskin, Founder of Living in Digital Times (LIDT), and Akin Sawyerr, Strategy and Governance Lead at Decred.

According to a report by Coindesk, Disparte, who is also Head of Policy and Communications at the Libra Association, had this to say about Bitcoin:

Bitcoin as an asset class has proven that mathematical scarcity can support an incredibly exciting asset. It's not a means of payment. It just isn't.

He also said that he became interested in the Libra project because he realized that "the bottom rung of the ladder of economic mobility is payment access" and that existing cryptoassets were not good enough for making payments.

He went on to explain the problem that Libra is trying to solve:

How do you drive mass adoption How do you remove insidious levels of friction that basically make it cost-prohibitive to give people access to payments?

Fellow panel member Akin Sawyerr was not convinced that Libra had the right answer:

I'm not convinced that a council of self-interested companies can do money better than a decentralized system. The only way to really get there is to empower the individuals to have some base-level sovereignty.

Disparte, however, claimed that it was not fair to apply a "crypto purity test" to Libra since permissionless crypto projects had failed so far to deliver a working scalable solution that could be used by people in the developing countries.

He then added:

It's not one or the other. The world is not zero sum.

 

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