By Alicia Maher
Square is owned by Twitter founder, Jack Dorsey. The financial service giant registered an increase in its yearly revenue due to Bitcoin transactions on its payment service application, Cash App. Square’s Cashapp is a peer-to-peer payment software that allows users transfer funds including cryptocurrencies between themselves easily. According to reports, Square was able to pool $2.72 billion from Bitcoin transactions within Q2, 2021.
For Q1, Square reported a $3.5 billion worth of Bitcoin transactions, higher than Q2 figure. However, the figure for the second quarter is still significant, as the firm was able to record such Bitcoin transaction volume despite the market decline that occurred in May. Interestingly, transactions with Bitcoin contributed the largest share to Square’s overall revenue of $4.86 billion within April and June.
Although its Q2 revenue declined in comparison to Q1, the effect of market correction on Square’s revenue is somewhat insignificant. The mid-May market correction had sent prices of cryptocurrencies careening, with some losing over half of their price and market value. Square reported $75 million in Q1, and $55 million later in Q2, a 26% reduction. With the market already rebounding from its long slumber, Square may surpass Q1 performance in Q3.
Meanwhile, the firm’s founder has stated that Bitcoin is the internet of finance while speaking at the online B-word conference. Dorsey was joined by SpaceX’s CEO, Elon Musk and Ark Investment’s Cathie Wood during the conversation, who both made positive comments about Bitcoin as well. According to Dorsey, Bitcoin is the future of money. He also added that the crypto asset will be part of Twitter’s future.
Square Loses $25 Million Out of Bitcoin Investment
During the market correction, Square recorded an impairment loss of $25 million which still remains an unrealized loss until a sale is made. General accounting principles require companies, with such standing as Square’s, to report losses on assets that are considered intangible. However, the same principles do not allow them to report gains on these assets.
Tesla and MicroStrategy Equally Record Bitcoin Losses
In a related development, software giant, MicroStrategy and EV manufacturer, Tesla recorded losses on their Bitcoin investments. Both firms are long term investors in Bitcoin. Tesla began investing in Bitcoin in February with a one-time $1.5 billion purchase of the asset while MicroStrategy’s Bitcoin investment dates back to 2020 and has been topping its Bitcoin holdings since then.
MicroStrategy is yet to trade off its Bitcoin holdings, but Tesla exchanged part of its holding in March to test the liquidity of the asset, according to its CEO. MicroStrategy’s CEO, Michael Saylor remains bullish on Bitcoin and declared recently that he would be holding the asset ‘forever.’ MicroStrategy has made more than $1 billion since it began accumulating Bitcoin, which it is yet to cash out. Currently, it holds about 105,085 Bitcoin which is estimated to be almost $3 billion.
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