Bitcoin Prices Fall, Tesla and Square are Counting their Losses
Some businesses that invested in bitcoin have reported losses as the cryptocurrency’s price has fallen, yet many others have profited.
During the BTC 2021 conference in Miami, Jack Dorsey, co-founder, and CEO of Twitter Inc. and Square Inc. participated.
Square announced late Sunday that its bitcoin-related investments cost the company $45 million in operating profits in the second quarter. That’s more than double the amount of money it lost in the first quarter.
In February, the digital payments firm said that it has purchased $170 million in BTC, doubling its previous buy from October 2020. As of the end of 2020, that accounted for roughly 5% of the company’s total assets. Square made the statement in its earnings report on Sunday, which was disclosed earlier than expected to coincide with the company’s $29 billion acquisition of Australian financial tech business Afterpay.
As bitcoin becomes more mainstream, businesses are increasingly embracing it. The world’s largest digital coin, however, had a difficult second quarter. BTC reached a high of $63,000 in April before plummeting to around $30,000 in early July. On Monday, Bitcoin was trading slightly around $39,000.
In its most recent quarter, Tesla, for example, reported a $23 million bitcoin-related impairment, according to the company’s second-quarter financial report released late last month.
This quarter, Square said it observed “significant year-over-year growth in bitcoin revenue.” BTC revenue reached $2.72 billion, a threefold increase year over year. Bitcoin’s gross profit was $55 million at the same time. This amounts to about 2% of bitcoin revenue.
The firm’s gross profit grew by 91 percent year over year, setting a new quarterly high. For the quarter, net sales excluding bitcoin were $1.96 billion, up 87 percent year over year.
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