The mobile payment processor Square has reported a huge increase in profit ratio, year-on-year, in its Q1 Bitcoin business. This revelation came to light after the US company released its Q1 earnings report. Square offers Bitcoin trading on its mobile Cash App mobile payments platform.
Square reported that its “bitcoin revenue” amounted to $306 million. This $306 million translated to only $7 million in profits in Q1, a ratio significantly smaller than some of its other sectors; its highest grossing sector was from Transaction Based Services, grossing about $293 million profit out of $758 million revenue.
(source: Square earnings report Q1 2020)
However, the revenue/profit in the Bitcoin sector was a whopping 700+% higher year-on-year, with the numbers showing that Q1 of 2019 saw $65.52 million in revenue for only about $829,000 profit.
The report said Bitcoin revenue “benefited from an increase in transacting active bitcoin customers and growth in customer demand as a result of the decrease in the price of bitcoin.”
Also by way of explanation, Square claim to sequester its “bitcoin revenue” because they “believe deducting bitcoin revenue better reflects the economic benefits as well as our performance from these transactions.”
Another interesting takeaway of the report was a positive effect from the US government’s CARES payments. The report surmised that a 300% increase in direct deposits and 400% increase in new direct deposit users in April was down to CARES, helping to “drive a significant increase in stored funds as, in aggregate, customers had more than $1.3 billion in cash balances stored in their accounts as of the end of April.”
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