Cash App's Bitcoin profits decreased in the third quarter, but overall profits increased.
Square Inc., Jack Dorsey's payments company, stated in its Q3 earnings report that mobile payments app Cash App had a 23% decline in quarterly profits generated by Bitcoin.However, Bitcoin profits and revenue are both rising year on year.
Square explains the fall in quarter-on-quarter Bitcoin revenue and gross profit to "relative stability of the price of Bitcoin, which affected trading activity compared to prior quarters."
Cash App enables users in the United States and the United Kingdom to buy Bitcoin and transfer money and BTC to each other. According to AppBrain, it currently ranks second in finance app downloads on the Google Play Store in the United States, following top-ranked crypto.com.
After dropping from a prior record of around $63,000 to about $31,000 in Q2, Bitcoin saw much less volatility in Q3, with prices ranging from about $30,000 to $50,000.
According to the earnings report, Bitcoin revenue reached $1.82 billion in the third quarter of 2021, with a gross profit of $42 million, reflecting 11% and 29% year-over-year rises. Some of the year-over-year growth is due to the rise in the price of Bitcoin, according to the research.
Cash App is currently targeting the teen market. On November 4th, Jack Dorsey tweeted that everyone 13 and older can now use the Cash App for peer-to-peer transactions, however, they can't deposit checks or buy Bitcoin at the moment. This puts Cash App in competition with Apple Cash's family feature. Incorporating Bitcoin functionality for teenagers would set it apart from other payment options, such as Apple Cash and Venmo, and potentially boost profits.
Even with lower Bitcoin revenue, Cash App generated $2.39 billion in revenue and $512 million in gross profit in the third quarter of 2021, reflecting 16% and 33% increases, respectively.
Cash App made waves earlier this week when it announced that it has partnered with popular NFL quarterback Aaron Rodgers to receive a portion of his salary in Bitcoin.
In after-hours trading, the stock of Square Inc. has dropped 3.87% to $237.88.