Despite $45M Square’s BTC Impairment Loss, Cash App’s Quarterly Bitcoin revenue has Tripled
Digital payment giant Square officially released the Shareholder Letter of the second quarter of 2021 on Sunday. Its financial data for the quarter showed that although the company's Bitcoin holdings were devalued by $45 million, the quarterly Bitcoin revenue of its Cash App has tripled.
Cash App is a mobile payment service developed by Square, allowing users to transfer funds using a mobile app.
Square Cash App generated $2.72 billion in Bitcoin revenue and $55 million in Bitcoin gross profit in the second quarter of 2021, both increasing by about three times year-on-year.
According to its disclosed data, Cash App recorded a 94% year over year (YOY) increase of the overall gross profit compared to last year, reaching $546 million and stating that:
"Bitcoin revenue and gross profit benefited from year-over-year increases in the price of bitcoin and bitcoin activities, and growth in customer demand."
Although Bitcoin has recently been strongly suppressed by China, it has fallen sharply by more than 50% from the historic high of $64,843 set in mid-April. Therefore, the intangible asset bitcoin investment has also been correspondingly impaired by $45 million. Still, Square revealed that according to the observing the market price, our fair value of the investment in Bitcoin is up to $281 million, which is $127 million higher than the carrying value of the investment as of June 30, 2021.
At the time of writing, Bitcoin has fallen from $42K to below $40K, and Bitcoin bulls are still struggling to push the price to the crucial psychological support level of $40K. According to Coinmarketcap, bitcoin has dropped by 4.43% within 24 hours and was trading at $39,901.66 during the intraday.
According to the price of Bitcoin today, Square currently holds 8,027 BTC, valued at approximately $320 million.
Jack Dorsey, CEO of American financial services and digital payments company Square, announced on Twitter Friday that Square is actively creating a new non-custodial, permissionless, and decentralised financial services business platform, mainly focusing on bitcoin virtual currency.
The leading enterprise analytics platform MicroStrategy also released its financial report for the second quarter of 2021, as reported by Blockchain.News on July 30. MicroStrategy said the company is delighted with its strategic investment in digital assets and will continue to deploy funds to invest in its "digital asset strategy."
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