Benzinga | Nov 5, 2021 09:35AM EDT

Square Sees Similar Drop As Robinhood In Crypto Activity, Cash App Bitcoin Revenue Slips 33% Sequentially In Q3

Square Inc's (NYSE:SQ) Cash App third-quarter revenue from Bitcoin (CRYPTO: BTC) fell over 33% compared to the previous quarter.

What Happened: The Jack Dorsey-led company said in its Q3 earnings letter that the Cash App generated $1.82 billion of BTC revenue in the period -- a rise of 11% year-over-year -- while gross profit rose 29% year-over-year to $42 million.

Cash App's gross profit rose to $512 million, which is an increase of 33% year-over-year.

In the preceding quarter, Cash App generated $2.72 billion of BTC revenue and $55 million in BTC gross profit.

On a quarter-over-quarter basis, Square's BTC revenue declined 33.08% while gross profit fell 23.64%.

"Compared to the second quarter of 2021, bitcoin revenue and gross profit decreased on a [quarter over quarter basis], driven primarily by relative stability in the price of bitcoin, which affected trading activity compared to prior quarters," said Square in its letter to shareholders.

In late October, Robinhood Markets Inc (NASDAQ:HOOD) also noted a fall in "crypto activity" in its third-quarter numbers attributing the decline to a fall in demand for Dogecoin (CRYPTO: DOGE).

See Also: How To Buy Bitcoin (BTC)

Why It Matters: Square's Q3 earnings per share amounted to $0.37, compared with an estimate of $0.39. Sales rose to $3.84 billion in the quarter -- a 27% year-over-year rise.

In July, Square announced a new Fintech company that would focus on Bitcoin and whose main goal would be "non-custodial, permissionless, and decentralized financial services."

Dorsey said in June that Square was considering making a BTC hardware wallet. He said BTC was "more important in my lifetime to work on" at a conference in Miami this year.

Dorsey, who also heads Twitter Inc (NYSE:TWTR), said this month that Square is looking to build an open-source BTC mining system.

Price Action: On Thursday Square shares fell almost 3% in the after-hours session to $239.96 after ending the regular session almost 2% lower at $247.46. At press time, BTC traded 0.58% lower at $62,119.12 over 24 hours.

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