Square's Cash App pulled in more Bitcoin revenue than fiat revenue during the first quarter of 2020, according to the company's shareholder letter released Wednesday. The app generated $528 million in
Square's Cash App pulled in more Bitcoin revenue than fiat revenue during the first quarter of 2020, according to the company's shareholder letter released Wednesday. The app generated $528 million in total Q1 revenue: $222 million from traditional payment services and $306 million from Bitcoin. Bitcoin now accounts for a larger share of Cash App's top-line revenue than all other offerings combined.
Gross profit gains came primarily from other sources. Bitcoin contributed just $7 million to the app's gross profits. Fiat services and other channels together added $178 million. Gross profit across the platform climbed 115% compared to the same quarter the year before.
The acceleration in Bitcoin revenue stands out. Cash App brought in $65 million from Bitcoin during Q1 2019. By Q1 2020, that figure reached $306 million, a $240.6 million increase or 367% jump. Square breaks out Bitcoin earnings as a separate line item to show it is "facilitating customers' access to Bitcoin," according to its SEC filing. The company makes money by taking a small margin on Bitcoin's market price when customers buy and sell the asset on the platform.
Square generated $8 million in Bitcoin profit during all of 2019. If the first quarter's momentum sustains through the year, 2020 Bitcoin revenue could reach much higher totals.
The SEC filing attributed the surge to "growth in the number of active bitcoin customers, as well as growth in customer demand." Jack Dorsey, Square's chief executive, told investors Wednesday that direct Cash App deposits fueled platform growth. The app reached "a very mainstream influencer audience," according to Dorsey.
The company continued expanding as the coronavirus pandemic strained other startups.
