The biggest contributor to Square's topline last year was selling Bitcoin. The payments firm disclosed in a regulatory filing that it made $4.57 billion in revenue from selling the cryptocurrency through its Cash app, making it the company's largest revenue segment.
Square's second biggest earner is transactions, which account for $3.29 billion of sales. Subscriptions, services and hardware account for another $1.5 billion.
Square's revenue growth in 2020 was almost completely driven by Bitcoin sales. The segment added some $4.2 billion to the topline compared to the $600 million added by all other segments.
"We saw unprecedented growth in Bitcoin revenues in the second and third quarter of 2020," Square's filing said.
Bitcoin revenues in 2020 rose nine-fold compared to a year earlier, when Square sold $516 million worth of Bitcoin. That figure represented a threefold jump from sales in 2018, when it started offering the service. All told, Bitcoin sales revenues have risen by 27 times since inception.
Square doesn't make much profit from Bitcoin sales. It reported $97 million in gross profit for the year from Bitcoin sales, or about 2% of revenues.
The firm said Bitcoin use increases overall gross profit from its customers and deepens engagement with its other products. It added 3 million Bitcoin users last year, and 1 million new Bitcoin users this January alone.
Square's chief financial officer Amrita Ahuja said during an earnings call that only one in 10 Cash App customers use Bitcoin currently.
"We see an opportunity to grow that over time," she said.
Square also disclosed that it bought $170 million in Bitcoin this month for its corporate treasury. In addition to the $50 million it purchased last October, the firm holds 8,027 Bitcoin worth about $409 million at current prices of $51,000 per Bitcoin. The firm held $3.2 billion in cash and cash equivalents at the end of last year.
Square chief executive Jack Dorsey explained the Bitcoin investment as a commitment to the firm's belief in a "native currency" for the internet.
"We believe the internet needs a native currency, and we believe Bitcoin is it," he said during an earnings call.
Dorsey said the firm would "double down" on its Bitcoin commitment and look for new ways to connect product lines related to the cryptocurrency. Responding to a question from a customer, he said more educational resources on Bitcoin and other asset classes were "definitely on the road map."