Square has had a busy weekend. The company made headlines for it’s purchase of Australia-based fintech firm, Afterpay, in an all-stock deal. Square then went on to release it’s Q2 2021 Shareholder Letter, filled to the brim with company insights – including some strong growth numbers in crypto transactions on Square’s mobile product, Cash App.

Square’s gross profit in Q2 was a healthy $546M, reflecting a 91% increase year-over-year. Bitcoin gross profit on Cash App specifically accounted for roughly 10% that, coming in at around $55M; this reflected a substantial increase from the $17M in bitcoin gross revenues that the company saw in Q2 last year.

Bitcoin yearly revenue saw exceptional jumps as well, rising over 200% to ring in $2.72B. This time last year that number was at $875M. While some may call out the relatively thin margin of gross profit relative to revenues, Square maintains that driving company profits from bitcoin transactions are clearly low-priority. Bitcoin gross profits reflected only roughly 2% of bitcoin revenues for Cash App in Q2.

In fact, the company explicitly calls out net revenues exclusive of bitcoin transactions. According to the shareholder report, Square deducts bitcoin revenue because their “role is to facilitate customers’ access to bitcoin.” The company is seemingly playing the “long game” with crypto, encouraging accessibility and minimizing fees.

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Despite substantial growth from the reported numbers year-over-year, bitcoin’s price has seen declines relative to the first quarter of the year. As such, both bitcoin revenue and gross profit from bitcoin for Cash App saw declines relative to Q1 2021 – as Cash App only charges a small margin on the market cost of bitcoin.

Accordingly, the letter notes that bitcoin price volatility in the quarters ahead, along with changes in customer demand, will likely continue to impact Cash App profits and revenues from crypto.

Additionally, Square has purchased $220M worth of bitcoin between Q4 2020 and Q1 2021. Because bitcoin is considered an “indefinite-lived intangible asset”, the company recognized a $45M impairment loss on the quarter on the firm’s bitcoin investment.

In all, Cash App’s continued success beyond bitcoin will likely bode well for the company’s crypto engagement, too. Cash App revenue excluding bitcoin in Q2 came in at around $600M – an increase of 87% year-over-year. Square’s broader Q2 numbers showed strong growth as well, with the quarter being the second-best in the past 5 quarters with regards to net income.

There is clearly more growth on the horizon when it comes to Jack Dorsey-led Square.

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