Cash App’s Bitcoin Income Rises, Retails Continues to Drive Growth

Square, the payment processing company, founded by Twitter chief executive Jack Dorsey, has had the first-hand experience of what can happen to a company’s finances when Bitcoin is brought into the mix. The firm, which provides cryptocurrency payment processing through its Cash App, has continued to post some impressive numbers as far as Bitcoin sales are concerned, and the fourth quarter of 2019 was no different. 

Bitcoin Money Grows for the Cash App

Earlier this week, the Silicon Valley company published an investor letter, which showed that across Q4 2019, it made $178 million in Bitcoin revenue, while combined non-Bitcoin income stood at $183 million. This means that almost half of all revenues going into the firm now come from Bitcoin transactions through the Cash App. 

The number showed a somewhat consistent trend, especially when compared with Square’s performance in Q3. At the time, the firm confirmed that it had made a total net revenue of $307 million from its Cash App, while gross profits stood at $123 million. As for Bitcoin revenues, those stood at $148 million for Q3 2019 – a figure which, at the time, marked a sixth consecutive quarter of growth in that metric for the firm and a staggering 244 percent increase over what was recorded in Q3 2018

The new investor’s letter also showed that across 2019 in total, Bitcoin accounted for over $500 million in revenues for Square across 2019, thus providing the company with profits amounting to about $8 million. The number is a significant increase from the $1.7 million Square made in profits in 2018. 

Figures also revealed that Bitcoin has continued to grow in popularity amongst smaller retail investors, with Q4 2019 accounting for almost 40 percent of the entire Bitcoin revenue made by Square in the year.  

Retail Focus Pays Off

The Cash App has been able to grow in prominence significantly, and for now, the firm has the popularity of Bitcoin amongst everyday people to thank for that. As the letter showed, the platform still hasn’t been overly popular amongst institutional investors, as the average monthly Bitcoin trades conducted on the platform in the last quarter were worth just $7.50. Regardless, that number itself more than doubles the $3.50 generated by the average user in a month as at the end of 2018.

Per-person revenues have also doubled, with average quarterly customer revenue growing from $15 in 2017 to $30 in 2019.

The popularity amongst retail consumers, however, seems to be a part of the plan. Over the past few months, Square has provided a couple of tools that will make it easier for its customers to improve their use cases for cryptocurrencies, thus giving them more of a reason to make transactions through its platform.

Back in October, the platform launched #Stacksats, a feature that will allow users to purchase several Class A stocks in cryptocurrencies. Dorsey also pointed out at the time that users who weren’t interested in making investments could also use the feature to buy fractures of a Bitcoin – known as Satoshis.

Regardless, it’s obvious that Bitcoin has been good to the Cash App, and by extension, to Square as well. Total profits for the payment processor amounted to $937 million in Q4 2019, and that was excluding the $373 million it made from selling Caviar, its food delivery service.