Shares in Square Inc. plummeted in after-hours trading after the financial services provider disclosed in its quarterly earnings report that it had purchased bitcoin at a time the cryptocurrency is declining in price.

For the quarter ended Dec. 31, Square reported revenue jumped 141% from a year ago, to $3.16 billion, in the quarter ended Dec. 31. Gross profit rose 52%, to $804 million, while earnings before interest, taxes, depreciation and amortization was $185 million. Earnings per share came rose 39%, to 32 cents. Analysts were predicting a 34-cent-a-share profit on revenue of $3.17 billion.

As it did in Square’s third-quarter earnings, bitcoin dominated the company’s financials, although this quarter with a twist. In the quarter Square reported $1.71 billion in revenue from bitcoin trading, more than the rest of its business, including its Cash App excluding bitcoin, booking revenue of $1.4 billion.

Square’s subscription-based revenue climbed 60% year-over-year, to $449 million, while gross payment volume was up 92% over the same period, to $32 billion.

The company declined to provide estimates for its first quarter of 2021 “given the uncertainty around the impact and severity of COVID-19” but did provide an update on how it’s currently tracking. Square said that in January, seller gross profit growth rose 15% year-over-year and its Cash App delivered profit growth of 164% over January 2020.

While Square is benefiting from allowing users to trade in bitcoin, the company purchase of bitcoin is not so clear-cut, even if it followed in the footsteps of Tesla Inc. — which disclosed a purchase of $1.5 billion in bitcoin Feb. 8. Square said it had purchased 4,709 bitcoin at an aggregate price of $50 million in October, equating to an average price of $10,617.

“The investment is part of Square’s ongoing commitment to bitcoin and the company plans to assess its aggregate investment in bitcoin relative to its other investments on an ongoing basis,” Square said.

The October investment was a nice earn for the company given that bitcoin subsequently surged to more than $50,000, but Square didn’t stop there.The company then purchased $1.5 billion more of bitcoin — 3,318 at an average price of $51,235. The price of bitcoin dropped as low at $45,393 in trading today, not long after Square published its earnings report and it was noticed by investors.

After falling 4.3% in regular trading, to $256.59, the share price of Square dropped almost 6% more in after-hours trading.

Image: Square