Cryptocurrency-based companies have enjoyed unusual success over the past few months, especially with the advent of Bitcoin’s price rise. This unprecedented success rate could also be attributed to more and more people entering the digital asset industry.
Square, the payment services provider founded by Twitter CEO Jack Dorsey recently revealed its 4th quarter earnings for Cash App which has pleasantly surprised its investors.
According to the figures released by the company, Cash App’s focus on bringing more apps into its fold has been one of its biggest upsides. As of December 2019, Cash App had more than 24 million active customers per month, a rise of 60 per cent compared to 2018. Bitcoin trading on the Cash App is quite popular, and that popularity has also been translated into dividends.
Cash App reported revenue of Bitcoin to be $178 million between November 1st and December 31st. Profits during the same period amounted to $3 million, a 50% improvement between Q2 and Q3 2018. All other earnings on the platform were estimated to be $183 million.
Post the release, Amrita Ahuja, the Chief Financial Officer [CFO] of Square stated:
“We are able to efficiently acquire customers, keep them engaged and show them additional ways we can continue to add value.”
According to the CFO, as Cash App users start using cryptocurrency services, they generally start producing more revenue for the company. This may be due to multiple options available in the domain of cryptocurrencies than in the world of fiat. The company as a whole generated profits of $8 million on $516 million in annual sales from Bitcoin.
Financial reports from the company have revealed that Square spent a total of $174.4 million on Bitcoin services in Q4 2019. The overall business budget was $508 million, which was much higher than the $164.8 million invested in 2018. Cash App was a major contributor to Square’s sales, which was estimated to be $1.31 billion last year.
Many estimates, such as subscription and service-based sales, increased by 45% to $281.4 million. Services that are not really based on cryptocurrencies have been a major moneymaker because of their ease of use. Square’s gross payment amount also increased by 25% to $28.64 million.
The gross volume amount is significant because it reflects the total dollar spent on transactions or products. The company’s transaction-based revenue increased 25% to $832.2 million. Square’s stock has definitely increased in the markets, with the firm receiving 23 cents per share, which was more than the analyst expected by 21 cents per share.
Analysts argue that if square succeeds in growing its Bitcoin business around the globe, particularly in regions with hyperinflation, it will have a massive advantage on fiat. Square is also expected to expand its payments sector through emerging regions such as Africa.