Square, which is led by Twitter chief executive Jack Dorsey, boasted a first-quarter revenue rise of 266% year over year, thanks to a major boost in Bitcoin revenue from Cash App.
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This article originally appeared on Financial News.
Payments fintech Square said it has no plans to buy more Bitcoin for its corporate treasuries, after losing $20 million on its $220 million investment in the cryptocurrency last quarter.
Square (ticker: SQ), which is led by Twitter chief executive Jack Dorsey and runs the payment app Cash App, became one of Bitcoin’s most prominent supporters last year after buying $50 million for its portfolio in October and an additional $170 million in February.
“We don’t have any plans at this point to make further purchases,” Square’s chief financial officer Amrita Ahuja told Financial News in an interview.
“There’s no plans at this point to re-evaluate where we are from a treasury standpoint,” she said.
However, she added that there are still “lots of other opportunities for [Square] to learn with Bitcoin.”
In Square’s most recent quarterly earnings, published on May 6, the company said it had lost $20 million on its Bitcoin investment despite its fair value rising to $472 million based on market prices.
Ahuja said the purchase of Bitcoin on its corporate treasuries amounted to about 5% of its cash on hand.
Ahuja’s comments came in the wake of Tesla chief executive Elon Musk’s decision to stop accepting purchases made with Bitcoin, citing its sizable environmental impact.
The move caused Bitcoin’s price to tumble as much as 14%, taking it below the key $50,000 threshold, though it later stabilized around that mark.
“We’re always evaluating and as ever, I think we’d be customer-led,” Ahuja said. “As we see the evolution of the Bitcoin product or crypto products in general, I think we’ll make further assessments at that point.”
Square had recently published a joint report with Bitcoin advocate and fund manager ARK Invest, in which it argued Bitcoin could be key to solving the clean energy problem.
It also launched a $10 million initiative in December to invest in companies that promote using clean energy for Bitcoin’s supply chain.
“Our position has always been that this is an area that needs innovation in terms of renewables and clean energy, and we want to be a part of that,” Ahuja said. “There’s a broader supply chain question around how renewables and clean energy become a greater part of the blockchain in general, and a greater part of the overall mining and transaction network…It’s the overall fixed footprint of the network that we need to address.”
Square’s first quarter revenue rose 266% year over year in March to $5.06 billion, thanks to a major boost in Bitcoin revenue from Cash App, which offers trading in the cryptocurrency to consumers.
Square reported $3.5 billion in Bitcoin revenue, 11 times what it made the previous year.
However, Square only makes a small margin on each Bitcoin transaction, which can also prove volatile. The firm’s Bitcoin gross profit was only $75 million, or approximately 2% of revenues from the cryptocurrency.
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