Square’s CashApp Bitcoin (BTC) revenue for Q1 2020 crossed $306 million as retail crypto purchase on the app continues to increase. The massive BTC volume recorded by Square comes despite one of the worst sell-offs in Bitcoin’s history in March 2020 as COVID-19 panic caused a cascade of liquidations in the financial markets.
Meanwhile, Square’s massive Bitcoin volume is indicative of a growing appetite for Bitcoin by both retail and institutional buyers. This uptick in BTC purchasing is coming amid the growing anticipation for the upcoming halving event predicted by many pundits to catapult the top-ranked crypto by market capitalization into another sustained bull rally.
CashApp Bitcoin Volume up 72% in Q1 2020
In its letter to shareholders, Square announced that Bitcoin volume on its CashApp grossed $306 million in Q1 2020. This figure represents a 72% increase from the $178 million revenue announced in Q4 2019.
Indeed, Square’s earnings from Bitcoin purchases have grown by more than 370% since the $65 million recorded during this same period last year; Q1 2019. The continued growth in BTC revenue points to the increasing stake being commanded by CashApp retail clients in the Bitcoin space.
In total, CashApp recorded total revenue of $586 million with a profit of $185 million. Bitcoin sales accounted for $7 million in profits while non-Bitcoin revenue produced $178 million. The Q1 2020 figures show the platform’s profit margin growing by more than 115% in the first quarter of 2020.
With Bitcoin profit already at $7 million, CashApp appears set to best its 2019 record of $8 million. This increasing profit margin from BTC sales comes despite the massive sell-offs during the Black Thursday panic of mid-March 2020.
Retail and Institutional BTC Buying on the Rise
The massive increase in BTC buying recorded by Square’s CashApp is part of a developing trend of hyperbitcoinization in 2020. Both retail and institutional appetite for the top-ranked crypto by market capitalization appears to be on the rise.
As previously reported by Blockonomi, Coinbase revealed back at the end of March that Bitcoin buying increased six-fold during the price crash that saw BTC fall to $3,800. The U.S. crypto giant also reported renewed interest from retail investors in altcoins as well while the market was experiencing a flash crash.
Coinbase even reported that the U.S government sending stimulus checks to Americans also spurred another round of ‘stacking sats.’ Data released by the crypto exchange showed a massive surge in BTC purchases worth $1,200 immediately following the release of funds from the government.
On the institutional side of things, the same trend of increasing appetite is also becoming more apparent. Grayscale Bitcoin Trust is seeing increasing inflows of investments from big-money players. Open interests in CME Bitcoin futures are also on the rise as crypto derivatives appear to be an attractive proposition for investors.
Halving Anticipation Reaching Fever Pitch
The upcoming halving is also creating further positive sentiments for Bitcoin with the imminent supply shock expected to trigger another price rally. Part of this anticipation comes from historical precedence which has seen the Bitcoin price set a new all-time high in the year following a BTC halving.
With the halving less than a week away, network activity is noticeably on the rise. The hash rate has reached a new high as miners dedicate more computing power to discover blocks that still have the 12.5 BTC reward. Transaction fees have also increased with the increase in activity causing transaction costs to rise significantly.
As at press time, the Bitcoin price is attempting another go at the $10,000-mark and is currently up by 2% over the last 24 hours.