Square Inc’s SQ Cash App generated 11 times more revenue from Bitcoin (BTC) in the first quarter of 2021 compared with a similar period last year.
What Happened: Cash App’s BTC revenue stood at $3.5 billion while gross profit was $75 million, both of which have surged 11 times on a year-over-year basis in Q1 2021.
In Q1 2020, BTC revenue was $306 million, while gross profit was $7 million. In terms of percentage gain, BTC revenue and profit have spiked 1,047% and 971.4% respectively.
In the first quarter of this year, BTC soared 103.21%. At press time, the apex cryptocurrency traded 0.93% lower over 24 hours at $56,343.66.
“Bitcoin revenue and gross profit benefited from a year-over-year increase in the price of bitcoin, bitcoin actives, and growth in customer demand,” Square said in its letter to shareholders.
“We recognize that bitcoin revenue may fluctuate as a result of changes in customer demand or the market price of bitcoin.”
Square shares rose 2.16% to $228.80 in the after-hours trading on Thursday after closing 3.41% lower at $223.96 in the regular session.
See also: How to Buy Bitcoin (BTC)
Why It Matters: The Jack Dorsey-headed company’s Cash App generated $4.04 billion of revenue and $495 million of gross profit, an increase of 666% and 171% year-over-year, respectively.
Cash App revenue excluding BTC stood at $529 million during the quarter, a rise of 139% YoY.
Square’s earnings per share rose 950% year-over-year to 17 cents, beating an estimate of 16 cents.
The quarter's total net revenue rose by 266.18 YoY to $5.06 billion beating an estimate of $3.33 billion.
In February, Square purchased $170 million worth of BTC. The company had purchased another $50 million worth in October last year.
See Also: Bitcoin Irresistible To Institutional Buyers Even At $54,000: What You Need To Know
Square recorded an impairment charge of $19.9 million in the three months ended March 31 due to the observed market price of BTC decreasing below the carrying value during the period.
The company said, that at the end of the quarter, the value of Square’s BTC investment was $472 million, which is $271.9 million in excess of its carrying value of $200.1 million.
Read Next: Jack Dorsey's Square To Fund Developers Of Popular Bitcoin Tool
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