Square all in on bitcoin among other cryptocurrencies

Square Inc. will exclusively focus on the bitcoin stack when it comes to consumer-oriented services around digital assets.

Consumers now can buy and sell bitcoin through Square's Cash App. The company is developing a hardware bitcoin wallet and a consumer-facing device for bitcoin mining, to allow users to participate in the mining of bitcoin at home or at a Square merchant, CEO Jack Dorsey said on the third-quarter earnings call Nov. 4. Bitcoin mining requires programmers to solve computational math problems and is typically conducted on high-powered computers.

Square has also created a new business unit called "TBD" to operate a developer platform for noncustodial, permissionless and decentralized financial services using bitcoin as the medium, Dorsey said.

"Our focus is on helping Bitcoin to become the native currency for the Internet," Dorsey said. "We have a number of initiatives towards that goal. Cash App is just one."

The emerging areas of growth — including TBD, the hardware wallet and bitcoin mining device as well as investments in music service TIDAL — will in aggregate represent approximately 5% of an incremental step-up in its 2022 operational expenditure, or about $140 million, on a non-GAAP basis, CFO Amrita Ahuja said in the call. Square acquired the majority stake of Tidal Music AS in April for $302 million.

In the third quarter, Square posted $1.13 billion in gross profit and $233 million in adjusted EBITDA. Its bitcoin revenues were $1.82 billion in the quarter.