Very close to half the revenue on Square’s Cash App in the fourth quarter came from bitcoin.

Jack Dorsey’s payments company reported on bitcoin (BTC) profits as part of its fourth-quarter 2019 revenue results, in a shareholder letter released Wednesday. It reported bitcoin revenue of $178 million between Oct. 1 and Dec. 31, with gross profits of $3 million, up 50 percent over the prior two quarters.

Non-bitcoin revenue on Cash App in the fourth quarter was $183 million. 

The company reported a year-end profit of $8 million on $516 million in yearly bitcoin revenue.

On Wednesday’s investor call, Dorsey said a Cash App redesign made it easier for new users to discover other services.

“The peer-to-peer transfers network continues to be our best acquisition channel,” Dorsey said. “Those new to the app then go on to discover bitcoin” and other in-app products, he said.

Later in the call, Chief Financial Officer Amrita Ahuja said once a Cash user starts using the app’s bitcoin or Investing features, they tend to generate two-to-three times the revenue of regular users. 

“We are able to efficiently acquire customers, keep them engaged and show them additional ways we can continue to add value,” Ahuja said.

Square rolled out bitcoin services on its Cash App across the U.S. in the summer of 2018. It serves as the buyer and seller of bitcoin for its customers. In June 2019, it started allowing customers to deposit bitcoin into the app.

During the third quarter of 2018, Square yielded only $43 million in bitcoin revenue through its Cash App, making today’s results indicate very strong growth in interest in the original cryptocurrency among the app’s users.

Ultimately, Square spent $174.4 million bitcoin services in the fourth quarter, for a total of $508 million for 2019. That’s compared to $164.8 million for 2018.

The Cash App as a whole drove $361 million in revenue in Q4. Square’s total revenue for Q4 2019 was $1.31 billion. Square’s profits for the year were $1.9 billion.

The company is projecting up to $715 million in transaction and bitcoin costs for Q1 2020.

Grand plans

Much of the bitcoin community has been watching to see what other contributions Square will make to the ecosystem. In January, the Square Crypto team announced it would focus on building out a software development kit to make it easier for applications to integrate bitcoin’s lightning network. 

Given Dorsey’s involvement with Twitter, the crypto community has long anticipated some kind of integration between the site and bitcoin. So far, neither Dorsey nor Square has done anything to substantiate such hopes. 

Still, analysts view the growth in Square’s bitcoin business as positive. Square stock was up 6 percent after the earnings report was released.

“If Square succeeds in growing its bitcoin business across the globe, especially in areas where fiat currency is not easily and readily accepted by merchants, and in hyperinflationary countries, the company will have a major advantage over its payment processing competitors,” Gartner analyst Avivah Litan told CoinDesk. “It will be able to grow its payment business among some of the fastest-growing and most promising economies of the world, located mainly in Africa.”

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