First Quarter Revenue Surges! Square and PayPal's Latest Financial Reports Reflect the Huge Opportunity in Cryptocurrency

The latest financial report released by Square on Thursday shows that the company's Bitcoin business revenue reached $3.51 billion in the first quarter of 2021. Meanwhile, PayPal's first full quarter financial report after launching its cryptocurrency business also indicates that the first quarter of 2021 was the company's strongest quarter ever, with record-breaking financial and operational performance.

Square Bitcoin Revenue Increased 11 Times Year on Year

According to Square's financial report, the company's total revenue in the first quarter of 2021 reached $5 billion, a 266% year-on-year increase compared to last year, more than double Wall Street's expectations. A significant reason for this growth is attributed to the cryptocurrency trading business offered by the company. Out of the $5 billion total revenue, $3.51 billion in revenue came from Square's cryptocurrency trading service for users, which is more than 11 times the $300 million in the same period in 2020.

On the other hand, the gross profit after deducting Bitcoin costs is approximately $75 million, while the total gross profit for Square during this period is $964 million, meaning that Bitcoin trading accounts for 7.7% of Square's total gross profit. Square stated in its financial report:

"Bitcoin revenue and gross profit benefited from the year-on-year growth in Bitcoin price, Bitcoin activity, and customer demand."

It is worth noting that Square seems to be seeking to provide more services to generate revenue for the company. Similarly, the social media platform Twitter, founded by the same founder as Square, announced yesterday a new feature on the platform called "Tip Jar." This feature allows users to tip each other through various payment apps including Venmo and Cash App, and it is currently uncertain whether this feature will include cryptocurrency as a payment option.

PayPal's Strongest Quarter

In addition to Square, another payment giant PayPal also released the company's first-quarter financial report this week. During the company's financial conference call, CEO Dan Schulman stated that the company generated $6.033 billion in revenue in the first quarter, emphasizing that it was PayPal's strongest year in history, with the first quarter being the strongest quarter ever in terms of financial and operational performance.

Dan Schulman pointed out that such outstanding performance is related to the company's cryptocurrency initiatives:

"Through our efforts in cryptocurrency, we have achieved many outstanding results strategically."

The CEO of this payment giant further stated that recent surveys indicate that approximately 74% of millennials expect to use cryptocurrencies in the next year or two, which could exceed expectations for business performance. At that time, we will introduce more cryptocurrency-related products or services under our protection for customers. Finally, Dan Schulman added:

"We expect to launch our next-generation digital wallet in the third quarter. Over the next year, we will accelerate customer digital engagement through rapid innovation in digital wallets and e-commerce platforms."