Payments Platform Square Struggles With Bitcoin Strategybr>
Payments platform Square is struggling to make a profit with bitcoin, according to its earnings report from earlier this week.
Square reported during its earning call that it has earned $34 million from bitcoin-related revenue, but spent almost that much to set it up with its platform. Square began offering bitcoin purchases within its Square Cash service in January.
The price plunge on bitcoin may be one reason. Square made$223,000 more from selling bitcoin than it paid to buy the cryptocurrency, a less than one percent return, The company’s overall bitcoin holdings was valued at around $200,000, down from $300,000 in the previous quarter, an expected plunge given the overall drop in bitcoin prices. Square purchases its bitcoin from exchanges or customers, and is subject to fees on those transactions and is vulnerable to market fluctuations.
In after hours trading on Wednesday, Square shares were down over 6% in response to future earnings guidance that fell lower than expected.