Square hauled in $3.51 billion in bitcoin revenue during 2021's first quarter, according to Thursday's earnings release.
That resulted in $75 million in gross profits during the same period. On a broader scale, Square said it made $964 million in gross profits for the period, meaning that the gross profits from its bitcoin offering contributed 7.7% to the total. The Q1 total exceeds Q4 2020's total of $1.76 billion in bitcoin revenue.
Bitcoin revenue and gross profit benefited from a year-over-year increase in the price of bitcoin, bitcoin actives, and growth in customer demand. In future quarters, we recognize that bitcoin revenue may fluctuate as a result of changes in customer demand or the market price of bitcoin," the firm said in materials published.
As the firm noted:
"Cash App delivered strong growth in the first quarter of 2021, generating $4.04 billion of revenue and $495 million of gross profit, which increased 666% and 171% year over year, respectively. Excluding bitcoin, Cash App revenue was $529 million for the first quarter, up 139% year over year."
In the release, Square also highlighted the performance of the bitcoin investment holdings it previously obtained.
"In the fourth quarter of 2020 and first quarter of 2021, we invested $50 million and $170 million, respectively, in bitcoin. As an indefinite-lived intangible asset, bitcoin is subject to impairment losses if the fair value of bitcoin decreases below the carrying value during the assessed period. In the first quarter, we recognized a bitcoin impairment loss of $20 million on our bitcoin investment. As of March 31, 2021, the fair value of our investment in bitcoin was $472 million based on observable market prices, which is $272 million greater than the carrying value of the investment."
This story is developing and will be updated with additional information.
Written by Michael McSweeney