Bitcoin (BTC) is slowly finding its way into the mainstream sector if Square’s third quarter financial report is anything to go by. The merchant payment service provider reported stellar Q3 earnings results, helped by Bitcoin revenues.
Square Bitcoin Revenues
Square posted a 68% year-over-year increase in revenue that came in at $882M USD. Revenue from Bitcoin operations, alone, stood at $43M USD. The company continued to reap from its early expansion into the cryptocurrency space in the quarter. While BTC sales account for the smallest component, they still represent a big chunk of total revenues.
Likewise, Square attributes the increase in revenue to a reduction in Bitcoin transaction costs. Actual profits from Bitcoin operations were consequently $500,000 USD, representing 20% year-over-year increase. Amidst the robust growth, Bitcoin still remains a niche for the company.
“Since we only apply a small margin to the market cost of Bitcoin when we sell Bitcoin to customers, and we have no control over the cost of Bitcoin in the market, which tends to be volatile. We believe deducting Bitcoin costs is a better reflection of the economic benefits as well as the Company’s performance from the Bitcoin transactions,” the company put forward in a statement.
Square could have reported more revenues from cryptocurrency operations had it added support for more altcoins. Currently, the payment service provider only supports Bitcoin (BTC) but looks set to add more cryptocurrencies going forward. Addition of more cryptocurrencies should lead to more revenues, likely to lead to higher margins.
Square Crypto Prospects
The payment service provider is on course to become a leading cryptocurrency provider. Its Cash App allows people to transact Bitcoin like any other form of money. The company secured a patent early in the year. Similarly, the patent should safeguard its operations when it comes to cryptocurrency and fiat currency transactions.
Square, unlike other mainstream payment service provider, acknowledges cryptocurrencies as a transformational technology. Its app serves many purposes other than holding BTC, and looks set to continue growing in popularity in the crypto space.
Square’s Cash App already boasts of more than 10 million installs on Google Play store. Increasing downloads show how people are slowly turning to the app to gain access to cryptocurrency transactions. Likewise, Square is steps ahead of other mainstream service providers such as PayPal when it comes to cryptocurrencies.
The launch of Square Terminal is already fuelling suggestions of possible integration of Bitcoin in debit and credit card payments.
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