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Square's Cash App deals operationally with bitcoin, but since being announced last fall, a $50 million investment from the cash reserves of the publicly traded company has grown significantly.
When the company announced the purchase in October 2020, Square's 4,709 Bitcoins were worth $50 million. The BTC (-15.23%) is now worth a whopping $253 million.
Square was an early entrant in the corporate bitcoin sweepstakes, alongside MicroStrategy. Elon Musk's Tesla was inspired by such treasury management games to invest $1.5 billion in bitcoin earlier this month.
Still, analysts are not as excited about the fraction of Square's treasury (approximately 1 percent of the total assets of the company when announced) that is crypto-denominated, ahead of Square's latest earnings report on Tuesday.
"There will be a greater focus on their customer base and Cash App's bitcoin purchases," said Chris Brendler, Seaport Global analyst. "In the fourth quarter, it ought to be a big number."
Consensus analysts estimate that Square will record bitcoin revenue of $1.5 billion, but those estimates could be off due to analysts who do not pay attention to the markets for bitcoin, Brendler said. His own estimate is $2.2 billion, an increase of $600 million from bitcoin transaction revenue from Square's third quarter.
Square reported $1.63 billion in bitcoin revenue in the third quarter of 2020, which resulted in $32 million of gross profit from the bitcoin product in that quarter.
Source: Bityard (https://support.bityard.com/hc/en-us/articles/900004630286-Blockchain-News-Square-s-50M-Bitcoin-purchase-is-worth-253M-now)