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Bitcoin purchases on Cash App more than doubled over the last year, showing how rapidly the appetite for cryptocurrency is growing.
Bitcoin Drives Square’s Revenues Up
Square disclosed that the second most-used finance app on Google Play, Cash App, recorded $178 million in revenues from Bitcoin purchases during the fourth quarter of 2019, the company said in a letter to its shareholders.
The firm posted gross profits of over $3 million, representing a 50% increase from the previous two quarters.
BTC purchases on the Cash App rose by 240% since Q4 2018, according to data from Messari. During that time, only $52.4 million in revenue originated from its Bitcoin services.
Jack Dorsey, CEO of Square and Twitter, said that a Cash App redesign made it ideal for new users to discover Bitcoin.
“The peer-to-peer transfers network continues to be our best acquisition channel. Those new to the app then go on to discover Bitcoin and other in-app products,” said Dorsey.
Thanks to the user experience improvements, BTC purchases accounted for 47% of Cash App’s total revenue. Nonetheless, it only represents 2% of its gross profits due to thin margins and competitive exchange rates.
Now, the company is projecting between $705 and $715 million in “transaction-based costs and Bitcoin costs” for Q1 2020.
Square’s involvement in the cryptocurrency industry is growing at a fast rate. In fact, the firm recently announced that it is building a development kit to make it easier for developers to deploy their applicators on top of Bitcoin’s Lightning Network.
Gartner analyst Avivah Litan believes that Square could position itself as one of the leading global Bitcoin payment processing companies now that it is penetrating some of the fastest-growing economies in Africa.
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