Square made $200,000 trading bitcoin (SQ)

pulse

May 3, 2018 7:01 PM

After launching bitcoin trading as an option on the Cash App, Square brought in a $200,000 profit without the aid of any transaction fees. Though its still in its early stages, the popularity indicates potential for monetization and expansion.

Bitcoin transactions brought in $200,000 of profit without the help of any fees.
Nomura Instinet research shows 60% of Square merchants are willing to take bitcoin as payment.

Square bitcoin on its business

Bitcoin brought in a $200,000 profit for Square in the quarter. The Cash App facilitated trading of the cryptocurrency without charging any fees. Price fluctuations in the cryptocurrency helped the company sell $34.1 million worth of bitcoin at a cost of $33.9 million.

Square founder and CEO Jack Dorsey has been an endorser of the cryptocurrency, saying it provides an bitcoin is a "transformational technology" and will be the world's "single currency" in 10 years.

"If they actually charged a fee as some of their competitors do, that number would be much higher," Nomura Instinet analyst Dan Dolev said. "They're just basically testing out, allowing people who don't normally trade bitcoin to trade bitcoin."

The company isn't depending on bitcoin for a large chunk of revenue but its popularity indicated potential, he said. Dolev's own research found 60% of Square merchants are willing to accept bitcoin as payment, so it's possible the company can monetize bitcoin use by enacting a fee once cryptocurrency is more widely used in day-to-day transactions.

The launch of bitcoin on the Cash App may have spurred downloads and increased adoption of Square by new customers according to Dolev. In the first-quarter, the Cash App hosted 7 million monthly active users and continued to be a top 25 app in Apple's App store.

While bitcoin comes with risks, specifically the digital currency's continued volatility in pricing, Dolev isn't worried about Square. He said even if bitcoin went to zero, Square will still be a successful company.

"The cohesive ecosystem that they're building is only going to get better," he said. "They already have a great brand. With [the acquisition of] Weebly, they're going to have much better access to the online channels. "

Square is up more than 22% this year.

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