10 million Cash App accounts purchased Bitcoin since 2018. Cash App generated $1.7 billion in Bitcoin sales for Block last quarter. What’s the reason and why did they choose CashApp. We investigate.
Block inc, the holding company behind CashApp has seen losses while gross profit decreased 42% to $43 million, around 3% of which are Bitcoin revenue.
The platform’s sales increased 26% to $667 million. Its profits were solid at $1.29 billion, up 34% year-on-year.
Cash App, a peer-to-peer money marketplace
Block, formerly Square Inc intends to increase customer knowledge and access to Bitcoin. With CashApp users can take fiat and Bitcoin payments with a 3% charge.
Earlier this year, the platform included the Lightning Network layer-2 Bitcoin scaling solution. Notably, Lightning Network transactions are free. However, Block reported that Bitcoin revenue and gross profit were down owing to price volatility.
This impacted consumer demand and trading activities. Experts say Bitcoin volatility isn’t driving people to Cash App. They see a steady increasing trend.
1.73 billion in bitcoin sales via Cash App in the first quarter of 2022
According to the post-market shareholder letter Bitcoin sales earned $43 million in Bitcoin gross profit.
“Cash App produced $1.73B in Bitcoin revenue and $43M in Bitcoin gross profit in the first quarter of 2022, down 51% and 42% year on year.
Bitcoin sales and gross profit climbed 138% and 155% over two years “Block noted in its shareholder letter:
“The year-over-year decrease in Bitcoin revenue and gross profit was driven primarily by relative stability in the price of Bitcoin during the quarter, which affected consumer demand and trading activity compared to the prior year period. Bitcoin revenue and gross profit were relatively consistent compared to the fourth quarter of 2021. In future quarters, bitcoin revenue and gross profit may fluctuate as a result of changes in customer demand or the market price of Bitcoin.”
CashApp is becoming a household brand
The young generation loves CashApp. It enabled easy peer-to-peer transactions even before bitcoin came around. And of course young users are attracted by a seamless mobile experience. Traditional banks simply don’t have the expertise to compete against a tech company when it comes to user experience.
But CashApp has also done a lot right when it comes to marketing. With a last minute deal the brand secured the title sponsorship for the 2022 Bitcoin Miami conference hosted by the Bitcoin Magazine. The Miami conference wasn’t a gathering of nerds but a grown up mainstream show targeted at the masses and the ever growing industry.
CashApp is doing a lot of things right when it comes to Bitcoin and Lightning and users are happy. No other app makes buying bitcoin as easy and fast and no other app has integrated lightning so early.
Why users prefer CashApp over Coinbase or others might simply because they have already used it before. Switching cost is high, considering the enormous KYC requirements and users love convenience.
The new features CashApp has planned have been applauded by the community, more lightning features, auto-investing spare change and payroll investing are no-brainers for most bitcoiners and interesting options for normal users to dabble into sound money.