(Duplicated-Rejected) Square Recorded $45 Million Bitcoin-Related Impairment in The Second Quarter

Square Inc, headed by Bitcoin advocate Jack Dorsey, reported its second-quarter earnings on Sunday evening. Based on its report, the financial technology company has announced that it witnessed an impairment loss of $45 million on the Bitcoin the firm holds in second quarter revenue, which is more than double its first-quarter impairment.

Tesla also had a $23 million Bitcoin-related impairment in its last quarter, the firm stated in its second-quarter earnings reported late last month.

As of June 30, the fair value of the firm’s Bitcoin investment was $281 million, $127 million greater than the holding value. The firm bought its Bitcoin for $50 million in October 2020 last year and made additional purchases worth $170 million in February this year.

Square stated that Bitcoin revenue of its Cash app service in the second quarter tripled to $2.72 billion from $875 million in a year earlier while its Bitcoin gross profit rose to $55 million from $17 million.

However, the revenue generated by the company in the second quarter this year is lower than the first quarter. In the first quarter, Cash app generated $75 million in Bitcoin gross profit on $3.51 billion Bitcoin revenues.

The drop in Cash app’s Bitcoin revenue came as the crypto market witnessed a bearish period since May when the prices of crypto tokens dropped by almost 50%.

 However, in the second quarter, Cash App’s Bitcoin revenue and gross profit benefited from year-over year increase in the Bitcoin activities, the crypto’s price, and growth in customer demand.

Fintech Firms Shaping the Crypto Market

Square’s disclosure on its earnings report on Sunday was released earlier than planned to coincide with the company’s announcement that the firm plans to make the Cash App available to more users by making an acquisition of the Australian fintech Afterpay in a $29 billion deal. 

With so many people using crypto assets like Bitcoin, businesses are considering accepting crypto payments for customers. Firms such as Square, AT&T, Tesla, PayPal, the Dallas Mavericks, and many others have all accepted Bitcoin and other cryptocurrencies to take advantage of the crypto craze.

 Bitcoin has hit new levels of mainstream interest among both financial institutions and investors and therefore it is getting easier to sell and buy crypto tokens. Specialized Bitcoin trading apps like Square’s Cash App have continued to improve in user friendliness.