Bitcoin Trading Nets Square $37 Million in Q2 2018
Square has announced earnings of $37 million for the second quarter of 2018 on its peer-to-peer mobile money app, Square Cash. However, even though some of its financial results exceeded expectations, the company still made a net loss of $6 million across the business.
Steadily Increasing Bitcoin Trading Revenue
Based on the second quarter performance report released by Square, Bitcoin trading revenue is steadily increasing. However, despite this increase, the company barely made a profit on BTC trading in Q2 2018. Square incurred $36,596,000 as the operational cost on BTC trading — meaning the company made less than a profit of $1 million on Bitcoin trading.
While the BTC trading feature on the Cash app is still in its early stages, critics have been quick to point out the lack of returns as a potential problem for the company.
In May 2018, the company announced that it traded $34.1 million worth of BTC in the first four months of the year. Square, however, made a profit of $200,000 — because it spent $33.9 million purchasing the BTC sold in that period.
A large percentage of Square’s operational cost for BTC trading stems from the amount of money spent in pursuing the swath of state and federal licenses required to legally trade cryptocurrency in the United States. Recently, the company became the seventh recipient of the notoriously difficult to obtain New York state BitLicense for trading cryptocurrencies in the state.
Despite the seemingly slow pace of growth from an earnings perspective, Square’s foray into the cryptocurrency space hasn’t been without its positives. Over the last twelve months, the company’s share price has increased by more than 200 percent.
The Square Cash app has also become one of the most popular mobile financial applications in the United States. Recently, it was revealed that the app had outstripped PayPal’s Venmo growth by as much as 300 percent.
Square CEO, Jack Dorsey, is a big believer in Bitcoin. Earlier in the year, he declared that he believed Bitcoin is the likeliest candidate for a single global currency within the next decade.
Do you think Square’s earnings from Bitcoin trading will increase once all the necessary state and federal licenses have been obtained? Let us know in the comment section below.
Image courtesy of Square and Tradingview.