It's no secret that Bitcoin (BTC +4.32%) is a hot commodity these days. The largest and oldest cryptocurrency is making headlines by the boatload, ranging from enthusiastic analyses of the digital currency's bright future to skeptical screeds focusing on its massive electric power requirements and uncertain value.
The widespread interest was sparked by Bitcoin's enormous price gains over the last year and change. Let's say you timed the stock market perfectly, buying into an S&P 500 index fund at the very bottom of the coronavirus crash in 2020. That investment would have doubled by now -- but Bitcoin's returns over the same period made the stock market's generous gains look completely frozen by comparison:
Bitcoin Price data by YCharts
And the Bitcoin chatter has moved far beyond the water cooler and the barbershop. Nowadays, you'll find the leaders of well-known companies taking cryptocurrencies seriously, often discussing Bitcoin and its peers in their earnings calls. Some of the things they say are quite surprising -- and the finest insights don't always come from the usual suspects. Here's a collection of the juiciest Bitcoin comments I've found in the latest earnings season's earnings calls.
Jack Dorsey champions the Bitcoin network in many ways
Let's start with a fairly obvious Bitcoin bull. Twitter (TWTR +0.00%) and Square (SQ 0.95%) CEO Jack Dorsey is a longtime cryptocurrency enthusiast, so it's not a shocker when he spends plenty of his conference call time on explaining how his companies are using digital currencies.
On Square's third-quarter call at the start of November, Dorsey outlined the digital payment company's recent launch of a Bitcoin mining system and a hardware Bitcoin wallet for consumers. The idea is to boost Bitcoin's exposure to a mainstream audience.
"Our focus is on helping Bitcoin to become the native currency for the internet. And so we have a number of initiatives toward that goal," Dorsey said.
One week earlier, Dorsey waxed poetic about microblogging service Twitter's brand-new tipping options, where Bitcoin-based tips to Twitter's content creators offer unique advantages over traditional cash contributions.
"What makes Bitcoin interesting is that it is globally accessible, doesn't matter where you are in the world. If you have a Bitcoin address to receive and you have Bitcoin to send specifically over the [high-speed Bitcoin transfer feature] lightning network, you can do it," he said on Twitter's third-quarter call. "We can participate, instead of having to go market-by-market and look for services that operate with a bank that's within each one of those [markets], so it gives us much more speed."
In other words, Jack Dorsey sees the Bitcoin network as a valuable digital payment system with real-world value and useful applications. He is doing what he can to promote that view, and also to build more use cases for Bitcoin payments. Twitter and Square give him two very different platforms from which he can pursue this vision of everyday Bitcoin payments.
Image source: Getty Images.
Al Kelly is building digital partnerships
In late October's fourth-quarter call, Visa (V 0.41%) CEO Al Kelly highlighted how cryptocurrency support is helping the credit card services giant form new partnerships:
Whether it's leveraging account data for value-added services or facilitating account-to-account or pay-by-bank money movement, open banking creates opportunities for Visa to offer our clients and partners a one-stop shop for money movement, security, data, and valuable customer experiences. Blockchains also will continue to expand our network of networks. Our settlement capabilities and our continued innovation around crypto APIs and services have been key to winning new partnerships. We have nearly 60 crypto platform partners with the capability to issue Visa credentials, and we're already capturing over $3.5 billion of payment volume in FY '21.
That's $3.5 billion out of $165 billion in processed transactions for fiscal year 2021. Visa can lean much further into the blockchain-based payment space before running out of unexplored growth opportunities. For now, the company is happy to help its credit card issuer partners launch Visa cards tied to Bitcoin and other digital assets. Most of the company's cryptocurrency payments action is going across international borders, meeting an unfilled need for quick and inexpensive international money transfers.
Image source: Getty Images.
Chuck MacFarlane sees opportunity in Bitcoin mining deals
Here's a different perspective. In the third quarter, Minnesota-based energy company Otter Tail (OTTR 2.34%) landed a large-scale power contract with privately held cryptocurrency mining specialist Applied Blockchain. Otter Tail CEO Chuck MacFarlane celebrated this Bitcoin and Ethereum (ETH +3.21%) mining agreement in the third-quarter earnings call on Nov. 2.
"Demand from the customer's facilities could approach 100 megawatts with a high load factor and the ability to [lower their power draw as necessary]," MacFarlane said. "We expect this load to be fully online by the end of the first quarter of 2022."
The digital mining deal was made possible by low tariff rates in Otter Tail's North Dakota market. Applied Blockchain is a "lower-margin customer," even under these favorable circumstances, MacFarlane said, but the slim margins still result in meaningful revenue and operating profits thanks to the cryptocurrency miner's massive power requirements.
MacFarlane would be happy to take on more Bitcoin-mining contracts like this one, if further opportunities materialize. Political pressure just might deliver some more Bitcoin business. Applied Blockchain originally planned to run its mining facilities in China but was forced to move elsewhere when Beijing's regulators cracked down on Bitcoin miners over the summer. Many other China-based miners are surely looking for low-cost power deals on American soil, too.
