Technology

Sq. noticed $ 45 million in impairment losses associated to Bitcoin within the second quarter

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Jack Dorsey, Co-Founder and CEO of Twitter Inc. and Square Inc., speaks during the Bitcoin 2021 conference in Miami, Florida, USA, on Friday, June 4th, 2021.

Eva Marie Uzcategui | Bloomberg | Getty Images

Square said late Sunday that its Bitcoin-related investments had hurt the company’s operating results by $ 45 million in the second quarter. That is more than double the first quarter impairment.

The digital payments company announced in February that it had purchased $ 170 million worth of Bitcoin and expanded its purchase in October 2020. That was roughly 5% of the company’s total assets at the end of 2020. Square’s disclosure came in its earnings report on Sunday, released earlier than planned, at the same time as the company announced that it would buy Australian financial technology company Afterpay for $ 29 Billion deal.

Businesses are increasingly leaning towards Bitcoin as it becomes more mainstream. However, the world’s largest digital coin had a rough second quarter. Bitcoin’s price peaked over $ 63,000 in April before falling below $ 30,000 in early July. Bitcoin was trading at just over $ 39,000 on Monday.

Tesla, for example, recorded $ 23 million in Bitcoin-related impairment in its most recent quarter, the company said in its second-quarter earnings report late last month.

Square said it still saw “significant year-over-year growth in Bitcoin revenue” last quarter. Bitcoin sales were $ 2.72 billion, up roughly three times over the previous year. At the same time, the Bitcoin gross profit was $ 55 million. That’s roughly 2% of Bitcoin sales.

The company’s gross profit increased 91% year over year, representing a record rate of growth for the quarter. Net sales excluding bitcoin were $ 1.96 billion for the quarter, up 87% year over year.

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