Shares of Square are up more than 6% today after the American fintech company reported revenue of a staggering $ 5.06 billion in its earnings report for the first quarter of 2021, well ahead of an expected figure of $ 3.36 billion .
Publishing the huge increase in sales, Square grew 266% compared to the first quarter of last year. Since this is the kind of growth we generally expect early stage startups to grow rather than mature public companies, some exploration is warranted. In short, Square’s bitcoin revenue and how it fits into its accounting is responsible for much of the oversized growth.
And that’s what we need to talk about.
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Square’s performance was strong aside from the Bitcoin-driven results. However, the Bitcoin income not only underscores the rising consumer sentiment regarding Bitcoin, but also an interesting perspective on the issue of Coinbase and its long-term fee structure.
Meddle in the tremendous growth in Bitcoin investing that Robinhood has seen and we can easily understand that consumers, at least in the American market, are not indebted to traditional cryptocurrency arguments about owning coins. And the pace at which non-Coinbase companies are increasing trading volume could indicate more competition in the now public crypto exchange than some fans, supporters, and believers expected.
So today we’re talking about Square revenue and its bitcoin base, especially in relation to the results of other companies offering bitcoin sales. Our broader question is whether consumers will behave as many expect, or whether the less crypto-focused ramps on Bitcoin and its brethren will prove to be more popular than many crypto enthusiasts expect.
If we remove the Bitcoin return on sales from the Square quarter, the company had sales of $ 1.55 billion, up 44% from the same period last year. This is impressive.
However, the sales growth related to Bitcoin has been far greater. From $ 306.1 million in bitcoin revenue in the first quarter of 2020 to $ 3.51 billion in the first quarter of 2021, Square wrote in its report that bitcoin revenue has increased significantly year over year, by about 11 times.