Square’s Bitcoin-related revenue has, for the first time, topped the revenue coming from all other services in the companies Cash app. Fiat profits still topped those coming from BTC, however.

The number of computers storing copies of the Bitcoin blockchain and validating transactions has fallen to a three-month low ahead of the halving, according to estimates from Bitcoin developer Luke Dashjr.

Cryptocurrency exchange operator ErisX has received a BitLicense, allowing it to serve users in New York.

Top stories in the Crypto Roundup today:

• Square’s Bitcoin Revenue Tops Fiat Figures for First Time in Q1 2020
• Number of Bitcoin Nodes Falls to Three-Month Low Ahead of the Halving
• Crypto Exchange Operator ErisX Receives BitLicense

At the time of writing, bitcoin (BTC) is trading at $9,317.16 (3.12%) with a daily Top Tier volume of $5.20 bn. As for ether (ETH), it is trading at $204.99 (-1.35%) with a daily Top Tier volume of $1.2 bn. The MVIS CryptoCompare Digital Assets 10 Index is currently tracking at 3,057.87 (2.14%).

Square’s Bitcoin Revenue Tops Fiat Figures for First Time in Q1 2020

Square’s first-quarter earnings revealed that its Cash App brought in a total of $222 million on all its fiat-powered services, while revenue from bitcoin was $306 million. This made it the first quarter in which bitcoin-related revenue surpassed all other revenue on the app.

The shareholder letter reported:

“In the first quarter, Cash App gross profit grew 115% year over year.”

Gross profit, however, remains in services not related to bitcoin. Out of the $222 million made in non-bitcoin revenue, $178 million were profit. Out of the over $300 million in BTC-related revenue, only $7 million were profit in the first quarter of the year.

The company, it’s worth noting, made a total of $8 million in profit via bitcoin-related services throughout the whole of 2019. In a filing with the U.S. Securities and Exchange Commission (SEC), Square wrote:

“Bitcoin revenue for the three months ended March 31, 2020 increased by $240.6 million or 367%, compared to the three months ended March 31, 2019. The increase was due to growth in the number of active bitcoin customers, as well as growth in customer demand.”

In the first quarter of 2019, Square’s revenues from bitcoin were $65 million, while in the last quarter of 2019 it was $178 million. In total, its revenue this quarter was $1.38 billion.

Number of Bitcoin Nodes Falls to Three-Month Low Ahead of the Halving

The total number of Bitcoin nodes fell below 47,000 earlier this week, a level that hadn’t been seen since 2017, based on estimated determined by Bitcoin developer Luke Dashjr. His numbers show the number of nodes has been steadily declining since peaking over 200,000 in January 2018.

A smaller number of nodes means there are fewer computers participating, storing copies of the blockchain and validating new transactions on the Bitcoin network. The low notably comes at a time in which the cryptocurrency’s price has been rising, and its hashrate nears all-time highs.

Determining the number of Bitcoin nodes relies on estimates and not concrete data. Dashjr revealed that his estimate relies on a tedious, undisclosed methodology that could be compromised if released. Bitnodes, a free service estimating the number of nodes, shows we’re hitting multi-year lows as well.

Previous bull cycles, according to Dashjr, were preceded b spikes in the number of Bitcoin nodes online. Since April 2019 node count has been dropping despite positive price developments, some node operators may simply be losing interest in the market’s failure to recover to previous all-time highs, seen in December 2017. Per Dashjr, running the software may also be becoming too hard for some.

“Running a [Bitcoin] node continues to get harder and harder with block sizes exceeding the rate of technological improvement.”

Matt Corallo, full-time open-source bitcoin developer at Square, noted that a drop in nodes may not be a problem is “enough” nodes are still operating on the network, according to CoinDesk.

Crypto Exchange Operator ErisX Receives BitLicense

Cryptocurrency exchange operator ErisX has received the coveted BitLicense from the New York State Department of Financial Services, and a money transmission license from the agency, according to a press statement.

In a statement Thomas Chippas, ErisX’s CEO, said:

"We are pleased that the NYDFS recognized our commitment to the high standards we borrowed from existing capital markets structures and applied them to the cryptocurrency space.”

The NYDFS noted the license will enable the crypto exchange operator to offer customers in New York the ability to buy and sell cryptocurrencies on its platform. It also serves as a clearing entity for crypto futures contracts bought and sold on ErisX.

The firm has to date raised a total of $47.5 million.

eToro - Bitcoin Halving 2020 Q&A

Bitcoin supply is finite; there will only ever be 21 million bitcoins in existence. This month, we’ll see bitcoin miner’s rewards halve from 12.5 to 6.25 for every block mined. This is the third such occurrence, and will mean just 900 bitcoins will be mined daily from the May halving until the next such event in 2024.

How different will the bitcoin halving be this time round, compared to previously?

“Whilst the mechanisms of this bitcoin halving will be the same as previous ones in 2012 and 2016, the development stage at which crypto finds itself today is very different.

The demographics of crypto investors have changed, there is more talk of crypto regulation and even central banks are launching their own central bank digital coin projects. The amount of institutional investment in crypto has increased and we are seeing more real-world use cases to spend crypto, including buying burgers at Burger King.

Add to this the current impact that COVID-19 is having on the world and people’s investment choices, and it’s not hard to see that the context in which this bitcoin halving will occur is very different from its previous ones.”

Will the halving of bitcoin impact the price of other cryptoassets? If yes, how so?

“Bitcoin is still the most dominant cryptoasset in terms of market cap and popularity to date and accounts for around 65% of total crypto market share. As such, other cryptoassets tend to track its price movements. We have seen price correlation between some cryptoassets and bitcoin over the years, but as more investors realise all cryptoassets have their own use case and not all are designed to be currencies, this correlation is weakening.”

Check out the full webinar hosted by eToro's Crypto Market Analyst, Simon Peters.

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