- Revenue from bitcoin trading feature rises 600% in Q2
- Bitcoin gross profit was up 711% at $17 million
- Bitcoin gross profit as a share of total is 2.85%, up from 0.55% in Q2 2019
Bitcoin-related revenue for digital payments company Square surged 600% year over year to $875 Million in Q2 as the public health crisis unfolded. The firm's overall Q2 revenue rose 64% year over year to $1.92 billion, beating expectations. Adjusted EPS was 18 cents versus a 5 cent loss forecast. Revenue growth would have been flat if not for bitcoin trading. The stock is up 11% this morning.
Square says it only applies "a small margin to the market cost of bitcoin," and it generated $17 million of gross profit from the transactions, up 711% year over year. Bitcoin gross profit as a percentage of the total has gone from 0.21% and 0.55% in Q1 and Q2 2019, respectively, to 1.24% and 2.85% in Q1 and Q2 2020, respectively.
In June, the company's Cash App, which facilitates bitcoin trading, had more than 30 million monthly active customers and gross profit for the ecosystem was up 167% year over year at $281 million. Cash App saw "strong adoption" of other products as well, such as Cash Card, Boost, and direct deposit.
Square's results point to the larger story of Bitcoin's surging popularity during the pandemic. As bond yields plunge and stocks market valuations surge to nosebleed levels, the cryptocurrency has become a place investors seek to gain "alpha" or the best returns, said Matthew Dibb, the co-founder and COO of Stack, to CoinDesk.