In the third quarter of 2020, U.S. payments firm Square sold substantially more bitcoin than was mined.
Square describes the firm’s Bitcoin revenue as the “total sale amount of bitcoin to customers.”
Over the course of the past quarter, approximately 82,000 bitcoin were mined, amounting to a combined market value of $1.26 billion at press time.
Bitcoin has a fixed supply of 21 million, which is substantially lower when lost and dormant coins are considered. Hence, as institutional and retail bitcoin accumulation continues, buyer demand threatens to overwhelm the circulating supply.
This phenomenon is multiplied by the effect of the halving earlier this year, during which the Bitcoin block reward for miners was cut in half, directly affecting Bitcoin's inflation rate.
PlanB, creator of the S2F model which predicts Bitcoin to hit between $100,000 to $288,000 by 2024, reaffirmed his confidence in the prediction on Sunday.
Increased institutional interest in Bitcoin has come hand in hand with strengthened infrastructure around the pioneering cryptocurrency as large players such as payments firm PayPal tap into the industry.
In turn, this results in easier access to Bitcoin, facilitating the entrance of new buyers - all while new supply remains uncompromisingly low.
Within three years, Square’s support for Bitcoin evolved into a $1.63 billion business for Cash App following strong annual revenue growth, according to Square’s SEC filing:
Cash App generated $1.63 billion of bitcoin revenue and $32 million of bitcoin gross profit during the third quarter of 2020, up approximately 11x and 15x year over year, respectively. Bitcoin revenue and gross profit benefited from an increase in bitcoin actives and volume per customer.