Square has “No” Plans to Expand Beyond Bitcoin to Cover Other Cryptocurrencies, says CEO Jack Dorsey
Cash App generated $1.82 bln in Bitcoin revenue in Q3, making up 47% of Square’s total sales. The company is planning to offer a pay with Bitcoin feature through the App.
Jack Dorsey’s Square Inc reported a 60% rise in third-quarter gross profits at $1.13 billion, which was fueled by an increase in Bitcoin transactions on its peer-to-peer payment services Cash App.
For the quarter ended Sept. 30, Square reported Cash App generating $1.82 billion in Bitcoin revenue, an 11% jump from a year earlier. Revenue from sales of Bitcoin represented 47% of Square’s total sales, though it only generated just 3.7% of Square's gross profit, money collected via fees from Bitcoin transactions, in the third quarter.
However, the Bitcoin revenue and gross profit decreased from the previous quarter as relative stability in the price of the leading cryptocurrency resulted in low trading activity.
As a result, shares of Square (SQ) fell about 5% but are still up 14% this year so far.
Meanwhile, total net revenue rose 27% to $3.84 billion while its gross payment volume, i.e., transaction processed on Cash App, also jumped 27% to $3.7 billion.
The San Francisco-based digital payments company also has $170 million worth of Bitcoin on its balance sheet, acquired early this year.
What’s in store?
During the company's Q3 earnings call, when asked if Square is looking to expand beyond Bitcoin and let users buy and sell other cryptos as well, CEO Dorsey had a clear “no” in answer to that.
“Our focus is on helping Bitcoin to become the native currency for the Internet.”
Towards that goal, the company is running several initiatives, including building a hardware wallet and exploring Bitcoin Mining, where they will introduce a consumer device to mine the crypto at home or in a business. Both the initiatives, Dorsey said, aims to help Bitcoin reach a mainstream audience while strengthening the network and ecosystem at the same time.
“We believe this focus is important. We believe it’s right. And a lot of it has to do with the resilience, the fundamentals, the principles that Bitcoin offers. And we also want to make sure that we’re giving back to the community as much as possible.”
TBD is another open developer platform that aims to make it easy to create permissionless, non-custodial, and decentralized financial (DeFi) services, for which a detailed plan will be shared later this month in a white paper.
The company is also planning to offer a pay with Bitcoin feature through Cash App Pay, where they are looking at lightning functionality.
Square also expanded its Cash App offering to teenagers in October, giving the company access to about 20 million teens in the U.S. alone, said Chief Financial Officer Amrita Ahuja. As of June, Cash App had a total of 40 million monthly customers.
“Those folks will represent a larger portion of spend in the coming years.”
“We can now meet an individual earlier on in their financial journey and grow with them over time.”