Mobile payments platform Square has announced that in the latest quarter it has made a profit from selling Bitcoin on its Square Cash app. Total revenues from Bitcoin amounted to $37 million, just over the costs of offering the cryptocurrency.
Chief Financial Officer Sarah Friar told reporters that currently Bitcoin was not “a major monetization engine” but that this was not a problem as the company’s primary goal “is to continue to drive utility in the Cash App.“
Price volatility risk
Square customers have been able to use the Cash App for Bitcoin trading since January of this year. As a way of offering instant crypto transactions, Square holds some crypto on its customers’ behalf. However, in the delay between Square acquiring Bitcoin and its customers making a trade, the company is exposed to price risk. The Bitcoin price is notoriously volatile, which can lead to losses for Square.
Friar explained that, “we have some spread in there to allow for the fact that bitcoin is volatile,” and reiterated that the lack of spectacular profits was not a problem. “We’re not trying to push on the monetization of bitcoin today,” she said.
Square may not be pushing for Bitcoin profits just yet, but even so the numbers are moving in the right direction. Profits from the second quarter were $420,000, more than double the first quarter figures. In Q1 Square sold $34 million of Bitcoin, but only managed to make around $200,000 in profit.
Jack Dorsey, who heads both Square and Twitter, is a known fan of cryptocurrencies. At the Consensus conference in May Dorsey said that “the internet deserves a native currency” and that at some point it would have one. Though he didn’t know if that currency would be Bitcoin, “I hope it will be,” he said.
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