While gross payment volume and net revenue fell short of expectations, Square, in its fourth-quarter earnings report, said Cash App monthly users grew to 36 million in December, or 50% year-over-year. Square also put down a $170M bitcoin investment, building on an earlier bitcoin purchase valued at $50M.

Why should we care?
As Square diversifies its product offerings, cryptocurrency activity – specifically bitcoin – is a growth driver for the company. Square reported $2.7B in revenue from Cash App, which lets users make peer-to-peer payments, as well as trade equities and bitcoin. Bitcoin transactions were also an important contributor to increased activity and revenue through Cash App: In 2020, more than three million customers purchased or sold bitcoin on Cash App, and in January 2021, more than one million customers purchased bitcoin for the first time. In the fourth quarter of 2020, bitcoin volumes per customer were up more than 2.5 times year-over-year, primarily driven by buying activity. The company’s bitcoin investment represents 5% of the company’s total assets. Square’s Chief Financial Officer Amrita Ahuja said the company wants to “align its incentives with cryptocurrency,” and that bitcoin has the potential to become “the native currency of the Internet.”