Square Customers Spent $2.7 Billion on Bitcoin in Q2 Square's Q2 reports revealed the complications of working with Bitcoin's volatility as well as a $29 billion fintech acquisition. By Liam Frost
In brief
* Jack Dorsey's digital payments firm Square has reported a total Bitcoin revenue of $2.72 billion in Q2 2021.
* Meanwhile, the company suffered an impairment loss of $45 million on its own BTC investments.
Digital payments company Square, led by Twitter founder and CEO Jack Dorsey, has revealed that users of its Cash App bought $2.72 billion worth of Bitcoin (BTC) during Q2 2021.
“While Bitcoin revenue was $2.72 billion in the second quarter of 2021, up approximately 3x year over year, Bitcoin gross profit was only $55 million, or approximately 2% of Bitcoin revenue,” Square stated in its shareholder letter published late yesterday.
The company’s Bitcoin revenue essentially means the total amount of BTC its customers bought during the reporting period. Notably, despite selling roughly three times more Bitcoin than in Q2 2020, Square’s gross profit amounted to $55 million—or roughly 2% of BTC revenue.
This profit resulted from the spread between the total BTC sale amount to customers and the cost of BTC Square purchased to facilitate those sales. This is because when users buy Bitcoin through Cash App, Square applies “a small margin to the market cost of Bitcoin, which tends to be volatile and outside our control.”
“Bitcoin revenue and gross profit benefited from year-over-year increases in the price of Bitcoin and Bitcoin actives, and growth in customer demand,” the firm noted.
However, Square’s Q2 Bitcoin performance was notably offset by the crypto market’s collapse in mid-May, when the price of many cryptocurrencies was slashed by roughly 50% across the board. By comparison, the company reported a Bitcoin gross profit of $75 million and a total BTC revenue of $3.51 billion in the first quarter of 2021.
May’s dip has also affected Square’s own Bitcoin investments. The company previously bought $50 million and $170 million worth of BTC in late 2020 and early 2021, respectively. While Square considers Bitcoin “an indefinite-lived intangible asset,” accounting rules required the firm to mark down its BTC investment by $45 million in Q2.
“As an indefinite-lived intangible asset, Bitcoin is subject to impairment losses if the fair value of Bitcoin decreases below the carrying value during the assessed period. In the second quarter, we recognized a Bitcoin impairment loss of $45 million on our bitcoin investment,” Square explained.
Still, on June 30, the fair value of Square’s Bitcoin investment reportedly amounted to $281 million, “which is $127 million greater than the carrying value of the investment.”
Notably, these figures won’t translate into any realized profits—or losses—until Square decides to sell its holdings.
Square scoops up fintech starlet
Alongside the latest letter to shareholders, Square also announced its plans to acquire Australian “buy now, pay later” platform Afterpay for $29 billion.
“Square and Afterpay have a shared purpose,” said Jack Dorsey, co-Founder and CEO of Square, in the announcement. “Together, we can better connect our Cash App and Seller ecosystems to deliver even more compelling products and services for merchants and consumers, putting the power back in their hands.”
The deal, which has an implied value of roughly $29 billion and is expected to be paid in Square’s stock, will be closed somewhere in Q1 2022.
Confirmed: AMC Now Accepts Bitcoin, Ethereum, Two Other Cryptos, Dogecoin To Follow November 12 2021 - 12:00PM NEWSBTC
AMC has now officially become the first theater chain to accept Bitcoin, Ethereum, and cryptocurrency payments on its platform. This has been a long time coming after CEO Adam Aron had first announced the entertainment giant’s plans to accept crypto payments by the end of the year. The announcement had said that it would accept crypto payments online for both movie tickets and concessions.
Crypto Payments On AMC Are Official Everything on AMC’s end looks to have worked right on schedule as the annulment three months ago had stated that the company would begin accepting crypto payments in the fourth quarter of the year.
Aron took to Twitter to announce the exciting news that AMC had in fact begun receiving payments in four cryptocurrencies. These included Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. Big newsflash! As promised, many new ways NOW to pay online at AMC. We proudly now accept: drumroll, please… Bitcoin, Ethereum, Bitcoin Cash, Litecoin. Also Apple Pay, Google Pay, PayPal. Incredibly, they already account for 14% of our total online transactions! Dogecoin next. pic.twitter.com/a7pqYBm7HB — Adam Aron (@CEOAdam) November 12, 2021
At first, Bitcoin was the only crypto that was to be accepted by the change but further reviews had seen the theater chain add more options due to popular demand. One of the reasons being bitcoin carried high transaction fees and would not be the most ideal option for carrying out small transactions. Not long after the bitcoin announcement, CEO Adam Aron had announced that Ethereum, Bitcoin Cash, and Litecoin would be joining the lineup.
Other additions came later after Aron had carried out a poll on Twitter. In the poll, he asked the community if they would like to see the popular meme coin Dogecoin accepted and the majority had voted yes. So AMC had incorporated Dogecoin payments for gift cards and plans to introduce Doge payments for movie tickets and concessions. When Are Dogecoin And Shiba Inu Payments Coming? In the announcement tweet, Aron had said that Dogecoin payments were coming.
There was no definite timeline given for this but with four cryptocurrencies already in operation, speculations are it would not be too far in the future. However, Aron had said nothing about its latest addition to its crypto lineup; Shiba Inu.
Related Reading | AMC Theatres Says Customers Will Soon Be Able To Pay With Shiba Inu
The CEO had carried out another poll on Twitter, but this time for Dogecoin’s rival Shiba Inu. Once again, the majority had voted in favor of adding the meme coin as a payment method and Aron had confirmed in an earnings call that it would be implementing Shiba Inu payments in the future. The SHIB community inquired about when they should expect to be able to pay with their coins, but there has been no update from AMC regarding the matter. Google Pay, Apple Pay, and PayPal were also introduced alongside cryptocurrency payments. Featured image from Bloomberg, chart from TradingView.com
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