Mobile payments using Bitcoin on Square’s Cash App have shown healthy growth based on the company’s unaudited second quarter results for 2018 released yesterday.

Square’s Bitcoin business showed $37 million in revenue over the period ending June 30, 2018 and with costs around $36.6 million showed a gross profit of $420,000 or 1.1% on their Bitcoin offering.

Square’s Bitcoin Revenue and Costs for the Past 2 Quarters

Q1 Q2 % Growth
Bitcoin Revenue $34,095 k $37,016 k 9%
Bitcoin Costs $33,872 k $36,596 k 8%
Bitcoin Gross Profit $223 k $420 k 88%
Bitcoin % Gross Margin 0.7% 1.1% 73%

While the revenue from Bitcoin comprises a reasonably small amount of the mobile payment firms overall top line (<5%) it’s impressive nonetheless that the company was able to grow revenue in a segment that has seen a general downturn in interest over the period.

Square also noted in their results a small amount of Bitcoin inventory held on their books, totaling $400,000 at the end of the quarter.

The price of Bitcoin fell approximately 8% over the company’s second quarter but what is perhaps more interesting is that Square was able to grow revenue even during lacklustre and general bumpy public interest in Bitcoin.

Google Trends Interest over time of “Bitcoin”

Square’s Bitcoin Business a Way to Diversify and Differentiate

The entry into the Bitcoin market seems to be a strategic move by the company that’s paying off for it not only in terms of overall growth but also to diversify the firm’s product offerings and help it differentiate in the increasingly crowded mobile payments space.

First released to the public at the end of January 2018, Square’s Cash App allows users to buy and sell Bitcoin.

The company began trials of Bitcoin payments during the bull market of late 2017 but has stuck with the embattled cryptocurrency, with founder and CEO Jack Dorsey going as far as predicting that it could be the “single currency” of the internet in the future.

However, adding Bitcoin to its Cash App as a way to differentiate from rival PayPal’s Venmo is more about providing value for customers than a profit centre at least at this time.

It’s not a major monetization engine, the goal is to continue to drive utility in the Cash App.Sarah Friar, Square Chief Financial Officer

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