According to the company’s shareholder letter, nearly half of Square’s Cash App revenue came from Bitcoin, bringing in $178 million compared to $183 million in revenue from non-Bitcoin sources.
Square’s Cash App began offering Bitcoin services to its US customers in the summer of 2018, serving as a buyer and seller for users. In 2019 the app began allowing customers to deposit their own Bitcoin into the app, and since then sales of Bitcoin through the app have exploded. In Q2 2018 Bitcoin revenue was just $37 million, compared to $125 million in Q2 2019 and now up to $178 million just two quarters later. Overall in 2019 the Cash App sold $517 million worth of Bitcoin, more than doubling the sales from 2018 with a 240% increase.
According to Dorsey, the redesign of the Cash App made it easier for users to find other services such as Bitcoin. Once they discover the investing or Bitcoin features they tend to generate two to three times as much revenue as other users.
Dorsey Pushes for More Bitcoin Adoption
The Square and Twitter CEO famously holds Bitcoin as his crypto of choice, holding no other cryptocurrencies, and has previously claimed his desire for incorporating Bitcoin payments on Twitter in early 2019. At this time there has been no news or plans laid out for using Bitcoin on Twitter.
But Dorsey brought this bullish sentiment to Square’s business model, introducing Bitcoin deposits for the Cash App just a few short months after spouting his support for the crypto. Previously users could solely convert their balances to Bitcoin. Early in 2020 Square announced the release of a Lightning Development Kit for easier integration with the Lightning Network.
Being one of the first payment processing application to properly integrate with the Lightning Network would give Square’s Cash App a huge advantage over its competitors.
Bitcoin Payments Still on the Rise
Square’s report echoes those from other companies that show Bitcoin usage among merchants and other payment apps such as Fold is steadily rising. Over the holiday season the Fold App reported that 80% of their users’ payments were made using Bitcoin.
This trend is further seen through the 600% increase in Bitcoin payments reported from 2018 to 2019.
With the Bitcoin Halving fast approaching, that usage will likely only increase, and payment processors will want to adapt so that they can grab as much of the Bitcoin payment market as possible.