Square Inc’s quarterly earnings report shows that the company is processing more Bitcoin transactions each quarter, though the growth is slow. According to the report recently submitted to the US Securities and Exchange Commission, the company reported revenue from Bitcoin at over $71 million in the first half of 2018.
Crypto Makes a Small but Significant Impact
In the first half of 2018, Square reported total revenue of $1.48 million with Bitcoin contributing $71.1 million, or 4.8 percent. Bitcoin transactions in the second quarter were reported at $37 million, a small increase over the first quarter number of $34.1 million.
The popular payment service app added support for Bitcoin transactions in November 2017, at a time when Bitcoin’s value was barely a month away from reaching its all-time highs. The company’s market capitalization was impacted significantly post the decision, inflating up to $8 billion.
Is Bitcoin Really a Cash Cow for Square?
It is important to note that Square isn’t pulling as much profit from its Bitcoin business as expected. In the first year of its business, the company has kept prices as low as possible to increase crypto engagements on its platform.
The company also stated that earning significant revenue from the cryptocurrency sector is not a priority right now. In the report, Square states:
“We consider our role in the bitcoin transactions to be facilitating customer access to bitcoin.”
Referring to their Bitcoin strategy, Chief Financial Officer Sarah Friar also stated on a call with reporters, “It’s not a major monetization engine.” The profit margin for Square in Bitcoin is less than 1 percent, and earnings amount to $643,000 in the first half of 2018.
An important consideration here is that Bitcoin profits doubled from $223,000 to $420,000 between Q1 and Q2. Even though this is not a significant portion of the company’s overall profits of $571 million in the first six months of 2018, it is a good achievement given bearish momentum the market has seen during this time.