Per the firm’s latest shareholder letter, which was published on August 1st, Square made over $100 million in Bitcoin-related revenues, representing a small yet fair portion of its operations.
Booming Bitcoin Biz
The shareholder states that in the second fiscal quarter of 2019, Square’s flagship product, payments app and lite-Bitcoin exchange Cash App, brought in $125 million in BTC revenue.
Over 90% of revenue in Square’s subscription, services, and transaction bucket came from its barebones Bitcoin exchange, which supports simple buys and sells. Due to low profit margins in the exchange business, the firm made away with $2 million in Bitcoin-related gross profit.
According to an analysis of the firm’s history with Bitcoin by The Block, Cash App’s BTC revenues are nearly double (90%) that of last quarter, during which the firm snagged $65.5 million in revenues. Q2 2019’s revenues are also up more than 240% since Q2 of 2018.
The rapid uptick in interest can be attributed to two things: Firstly, the value of Bitcoin skyrocketed from the start of Q2 to the end of Q2. In fact, if Square follows a normal fiscal quarter, BTC rallied by approximately 200% during the quarter, moving from $4,000 to the $12,000 region.
With this rapid swing higher, which caught many bears with their pants down, trading volumes across exchanges the industry over spiked, which was a trend supported by an increase in the mainstream coverage of cryptocurrency.
Secondly, the so-called “stacking satoshis” movement, which sports the memorable hashtag #stackingsats, gained lots of traction this quarter.
Popularized by Matt Odell, Marty Bent, American HODL, and other personalities on Bitcoin Twitter, this movement promotes the repeated purchase of small portions of BTC through Cash App.
While it isn’t clear how much of Square’s Bitcoin revenues is related to devotees of the stacking movement, it likely hasn’t hurt.
Square Crypto Brings on First Staffer
Square’s rapidly growing Bitcoin exchange business comes as the fintech firm’s crypto division has brought on its first staffer. Announced back in mid-June, the Jack Dorsey-headed firm brings on Steve Lee, a former director of Google, where he headed work on Google Maps, and an ongoing evangelist for and contributor to Bitcoin.
The Silicon Valley veteran also is an angel investor of Lyft, Pinterest, and other technology startups. It isn’t clear exactly what Lee’s role is at Square Crypto, or what the Google alumnus is currently working on.
The firm is currently looking for open blockchain developers but has been quite picky with who to choose, claiming that it has received over “1,500” resumes. Square is expected to make its first developer hire in the coming weeks.
By the end of the hiring period, chief executive of both Square and Twitter, Jack Dorsey, will have handpicked one or two designers and three to four blockchain developers. Dorsey’s vision is to promote the viability and use of public blockchains.
For now, Square Crypto’s staff will be focusing on Bitcoin. In a recent “ask me anything” on Twitter, Lee took some time to answer some of the crypto community’s inquiries about the project. During that, Lee explained that his division will be “focusing on Bitcoin”, noting that it has the longest lifespan of any cryptocurrency and needs to be worked on a lot to achieve mass adoption.
This lines up with the vision put forth by Dorsey, which he has shared with comedian-turned-legendary podcaster Joe Rogan and cryptocurrency-friendly outlet Quartz. He said through those outlets that he believes that Bitcoin is best suited to become the Internet’s native currency.