In the fourth quarter of 2019, customers bought $178 million in Bitcoin from Square’ Cash app.
According to the financial report of the quarter four of Square, the payments company founded by Twitter CEO Jack Dorsey, the peer-to-peer payments and stock trading Cash App generated $361 million in revenue. Half of the Cash app’s 4Q19 earnings, however, came from bitcoin trading.
Overall in 2019, the cryptocurrency brought in $510 million in revenue to Square. The company first rolled out its bitcoin services on its Cash App across the US in the summer of 2018. Then in mid-2019, Square started allowing its customers to deposit bitcoin.
Square’s Chief Financial Officer Amrita Ahuja said on Wednesday’s investor call that its customers that are involved in bitcoin buying and selling tend to generate two or three times the revenue generated by its regular users.
“We are able to efficiently acquire customers, keep them engaged and show them additional ways we can continue to add value,” said Ahuja.
Now, for the first quarter of 2020, Square is projecting up to $715 million in transaction and bitcoin costs amidst the coronavirus scare. This has been unlike its competitor PayPal which has cut down its quarter first revenue growth by one percent like many other industry giants. This could very well be because nearly 90% of Square’s revenue was generated inside the United States.
Growth Despite Bitcoin Performance
Interestingly, Square’s Cash app recorded growth in bitcoin sales in every single quarter. The company registered 239% of year-over-year growth, marking the 7th straight quarter of growth.
What’s even more notable is that this increment has been seen notwithstanding the performance of bitcoin which lost 84% of its value in 2018 but surged 88% in 2019.
Bitcoin is an integral part of the company given that it contributed to half of its revenue. Also, Bitcoin proponent Dorsey believes Bitcoin will become the currency of the Internet one day and launched Square Crypto that announced a Lightning Network development kit last month.
Overall, the company exceeded the expectations of the market analysts by bringing in over $1.3 billion in revenue. With this solid 41% YoY increase in revenue, Square shares soared 10%.
Additionally, the company reached 24 million active users in the three months ending Dec. 2019, an increase of 60% versus 2018.