Surging interest in trading among Square Cash App customers helped revenue more than double in the fourth quarter. The company has reinvested some of those profits by buying another $170 million worth of Bitcoin.
Square disclosed that it purchased 3,318 Bitcoins, which indicates an average price of about $51,235 per coin. The company’s total Bitcoin holdings is now equivalent to approximately 5% of its cash and cash equivalents.
For comparison, Tesla’s recent $1.5 billion purchase of Bitcoin amounted to about 8% of the company’s cash equivalents.
“Aligned with the company’s purpose, Square believes that cryptocurrency is an instrument of economic empowerment. Providing a way for individuals to participate in a global monetary system. And secure their own financial future,” the company wrote in a press release.
“The investment is part of Square’s ongoing commitment to Bitcoin. And the company plans to assess its aggregate investment in Bitcoin relative to its other investments on an ongoing basis.”
Square currently offers Cash App users the ability to buy and sell BTC as well as a select group of equities. The company had 36 million overall monthly users in December. Over a million of those customers purchased BTC for the first time in January.
Square posted fourth-quarter revenue of $3.16 billion, which was up from $1.31 billion in 2019. That also was ahead of the $3.10 billion analysts had expected.
More than half of Square’s quarterly revenue total came from Bitcoin. Meanwhile, $987 million came from its seller business and $2.17 billion came from the Cash App.
“Bitcoin revenue and gross profit benefited from an increase in BTC actives and growth in customer demand, as well as a significant year-over-year increase in the market price of Bitcoin,” the company said.
Square’s shares down, Bitcoin price unaffected after announcement
Square’s shares fell by about 5% in after-hours trading. However, the company’s shares have gained 23% over the past three months.
The price of Bitcoin was mostly unaffected after Square’s announcement. It is currently trading at $49,000, which is down from the all-time high of $58,000 it reached over the weekend.