Square made waves in 2020 with Bitcoin, and is now looking to dive deeper into the crypto world

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  • The payments giant posted major volume and revenue growth driven mostly by Cash App’s crypto service.
  • And it may now be looking to ramp up its crypto offerings further with its massive Bitcoin investment.
  • Insider Intelligence publishes hundreds of insights, charts, and forecasts on the Payments & Commerce industry.

Square processed $32 billion in gross payment volume (GPV) in Q4 2020, posting a 12% increase from Q4 2019, per its latest earnings release. Square’s growth mirrors that of the previous quarter, when it processed $31.7 billion in GPV as it bounced back from the initial impact of the coronavirus pandemic.

Square’s Cash App was the true star of Q4: The peer-to-peer (P2P) payments app closed out December with 36 million active customers, surging 50% YoY—likely driven by the increased momentum of its crypto trading service. Square is now looking to strengthen its crypto business by investing a massive $170 million in Bitcoin, following its $50 million investment in October, per the company’s earnings call.

Square’s crypto service reached new heights in 2020 as more consumers flocked toward digital currencies—likely helping boost Cash App revenues and engagement along the way.

  • The P2P payments app experienced a significant boost in revenues thanks to crypto. Cash App’s Bitcoin revenues skyrocketed nearly 900% year over year (YoY) in Q4, reaching a value of $1.76 billion. This may be because consumers have taken more interest in digital currencies amid the pandemic as cryptos continue to become more prevalent—likely enabling Cash App to buoy Square’s revenues.
  • Cash App garnered increased app engagement from users leveraging its crypto service throughout 2020. More than 3 million users bought or sold cryptocurrencies using Cash App in 2020, according to Square CEO Jack Dorsey. And in January 2021 alone, more than 1 million customers bought Bitcoin for the first time using Cash App—which is indicative of the app’s growing platform engagement. This comes as consumers continue to warm up to cryptos: 45% of consumers said they prefer to invest in Bitcoin over stocks, real estate, and gold, per a survey conducted by The Tokenist.

As the crypto space heats up, Square can leverage its Bitcoin investment to maintain growth and engagement. Cryptos are starting to go mainstream, with a number of large players signaling support for the growing offering: Crypto payment service provider BitPay recently forged partnerships with the major mobile wallets, while Visa and Mastercard both plan to integrate digital currencies into their networks.

Square’s recent Bitcoin investment likely points to additional crypto offerings coming down the pipeline, as it may look to follow in PayPal’s footsteps and introduce crypto as a funding source within its seller network, which could enable Square to increase its merchant engagement and strengthen existing relationships. Square might also use its investment to build out existing crypto offerings, such as by expanding its Bitcoin rewards program for Cash App customers, for instance.

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