Square said on Sunday night that its bitcoin-related investments impacted the company’s second-quarter operating profit by $ 45 million. That’s more than double its first quarter depreciation.
The digital payments company revealed in February that it had bought $ 170 million worth of bitcoin, extending its October 2020 purchase. This represented around 5% of the company’s total assets at the end of 2020. The Square’s disclosure was released in its earnings report on Sunday, which was released earlier than expected to coincide with the announcement that the company would buy Australian fintech firm Afterpay for $ 29. billion business.
Companies are turning to bitcoin more and more as it becomes more mainstream. However, the world’s largest digital coin had a tough second quarter. The price of Bitcoin peaked above $ 63,000 in April before dropping below $ 30,000 in early July. Bitcoin was trading at just over $ 39,000 on Monday.
Tesla, for example, recorded a $ 23 million bitcoin-related depreciation in its most recent quarter, the company said in its second quarter earnings report late last month.
Square said it again saw “significant year-over-year bitcoin revenue growth” in the last quarter. Bitcoin’s revenue was $ 2.72 billion, up about three times from the previous year. At the same time, Bitcoin’s gross margin was $ 55 million. This represents about 2% of bitcoin’s revenue.
The company’s gross profit increased 91% from a year ago, marking a record quarterly growth rate. Net revenue excluding bitcoin was $ 1.96 billion for the quarter, an increase of 87% year-over-year.