Hearing about the whopping figures that bitcoin exchanges are bringing in, one might be led to believe that all businesses in the field are making money hand over fist. Latest figures from Square, however, show that is not necessarily the case. At least not in the short term.
Also Read: Bitcoin Is Not Used by Organized Crime Says Hong Kong Government
SQ Reports Strong Q1
Square Inc (NYSE:SQ), the developer of the mobile payment app Square Cash, has posted its financial results for the first quarter of 2018 on Wednesday, showing overall strong performance. Total net revenue was $669 million, up 45% year over year, and Adjusted Revenue was $307 million, up 51% year over year.
Despite its impressive yearly growth, the company’s stock price fell by about 6% in after-hours trading on Wednesday. Many analysts attribute this drop in SQ shares to the disappointing figures the company presented via its bitcoin-related business. Bitcoin revenue contributed $34.1 million to total net revenue in the first quarter, but cost was $33.9 million resulting in a minor add to adjusted revenue of just $200,000.
Taking the Long View
Square CEO, Jack Dorsey, addressed questions about his take on the bitcoin business in the conference call with analysts following the release of the quarterly report. He thinks that the company has a very different customer base than the majority of bitcoin exchanges so they wanted to initially provide just a safe way to participate in the market. “It’s a demographic that typically would not be able to use other exchanges or would find those complicated and something that we wanted to make super easy, but at the same time, continue to protect and make it safe.”
“In terms of the strategy long-term, the first step
