Square’s bitcoin-related investments weighed $ 45 million on operating income in its second quarter, the company said Sunday night, more than double its deterioration from the first quarter.
Square, a digital payments company, revealed in February that it bought $ 170 million worth of bitcoin, expanding on its October 2020 purchase. That represented about 5% of the company’s total assets at the end of 2020. Square’s disclosure was made. produced in its earnings report on Sunday, which was released ahead of schedule to coincide with the announcement that the company would buy Australian fintech company Afterpay for a $ 29.1 billion deal.
Businesses are increasingly leaning towards Bitcoin as it goes mainstream. But a rough second quarter for the world’s largest digital currency means holdings it would be worth much less than at the end of the first quarter. The price of Bitcoin peaked at $ 63,000 in April and then fell below $ 30,000 in early July. Bitcoin was trading at just over $ 39,000 as of Monday morning.
Tesla, for example, posted a bitcoin-related impairment of $ 23 million in its latest quarter, the company said in its second-quarter earnings report late last month.
Square said it still saw “significant growth in bitcoin revenue year-over-year” this last quarter. Bitcoin’s revenue amounted to $ 2.72 billion, roughly three times that year over year. At the same time, bitcoin’s gross profit was $ 55 million, or about 2% of bitcoin’s revenue.
Meanwhile, gross profit increased 91% over the previous year, marking a record quarterly growth rate. Net income, excluding bitcoin, amounted to $ 1.96 billion for the quarter, an 87% year-over-year increase.
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