The Shareholder Letter for the second quarter of 2021 was formally issued on Sunday by Square, the digital payment company. Although the company’s Bitcoin assets were depreciated by $45 million during the quarter, the quarterly Bitcoin income of its Cash App quadrupled.
Square’s Cash App is a mobile payment service that allows customers to transfer cash using a mobile app.
In the second quarter of 2021, Square Cash App produced $2.72 billion in Bitcoin sales and $55 million in Bitcoin gross profit, up nearly threefold year over year.
Cash App reported a 94 percent rise in overall gross profit year over year (YOY) compared to the previous year, hitting $546 million, and noting that:
“Bitcoin revenue and gross profit benefited from year-over-year increases in the price of bitcoin and bitcoin activities, and growth in customer demand.”
Even though China has heavily repressed Bitcoin, it has dropped by more than 50% from its record high of $64,843 established in mid-April. As a result, the intangible asset Bitcoin investment has also suffered a $45 million loss. Still, according to Square, our fair value of the Bitcoin investment is up to $281 million, which is $127 million greater than the carrying value of the investment as of June 30, 2021, based on market price.
Bitcoin has slid from $42K to below $40K at the time of writing, and Bitcoin bulls are still battling to drive the price back up to the important psychological support level of $40K. Bitcoin has lost 4.43 percent in the last 24 hours, according to Coinmarketcap, and was trading at $39,901.66 during the afternoon.
On Friday, Jack Dorsey, the CEO of Square, an American financial services and digital payments firm, revealed on Twitter that Square is working on a new non-custodial, permissionless, and decentralized financial services business platform, emphasizing the Bitcoin virtual currency.
MicroStrategy, the premier corporate analytics platform, also issued its financial report for the second quarter of 2021 on July 30. MicroStrategy said it is pleased with its strategic investment in digital assets and would continue to invest in its “digital asset strategy” using the cash it has put aside.