Mobile payments firm Square has reported over $166 million in revenue from bitcoin sales last year.
The company filed its financial results for Q4 2018 with the U.S. Securities and Exchange Commission (SEC) on Wednesday, disclosing that it made overall net revenue of $3.3 billion last year, 5 percent of which came from the cryptocurrency buying service within its Cash App.
While bitcoin sales brought in precisely $166,517,000, the cost of purchasing the cryptocurrency for the year was about $165 million. That left the firm with a net profit from bitcoin sales of $1.69 million.
Looking at Square’s quarterly figures, the bitcoin business was notably better in the second half of last year.
Specifically, the firm took $95 million in bitcoin revenues in the second half, compared with about $71 million in the first half. Profit for the second half was $1.047 million, and was $643,000 in H1.
The firm further disclosed that the carrying value of bitcoin held by the firm was $200,000 as of Dec. 31, 2018. The firm said it assesses the carrying value at each reporting date and records an impairment charge if the carrying value exceeds the fair value. However, loss on bitcoin for the year 2018 was “insignificant.”
Square added bitcoin buying and selling option to its Cash App back in November 2017, initially only to a small number of users though. Later, in August 2018, the firm expanded the facility to all 50 U.S. states. The firm received a “BitLicense” from the New York Department of Financial Services (NYDFS) last June, that allowed it to offer crypto services in the state.
With this we see an opportunity in the fintech sector to support and grow with this technology. Traditional financial businesses like JPMorgan, Chase and others have shied away from cryptocurrencies but others have seen an opportunity to work with and facilitate the onramps from fiat to the crypto world and as this report shows, they have been able to make a substantial amount of money. Considering the low percentage adoption rates at this point, that number could be significantly higher when those rates rise.
Individual states like New York offering licenses to operate and offer crypto services in the state are potentially the earmark of a big move towards acceptance. Can the federal government be far behind?