Block’s total revenue plummeted by around 6% as the crypto winter continued, accompanied by a significant depreciation of its Bitcoin assets. Block Inc., Jack Dorsey‘s digital payments startup, revealed a $36 million Bitcoin depreciation in the second quarter, which it ascribed to “broader uncertainty around crypto assets.”
Block stated in a shareholder letter on Thursday that its Cash App—an online payments service that facilitates cryptocurrency purchases—generated $1.79 billion in Bitcoin sales and $41 million in Bitcoin gross profit, both of which were down 34% and 24% year on year.
The firm stated in its earnings report for the second quarter of 2022:
“The year-over-year decrease in Bitcoin revenue and gross profit was driven primarily by a decline in consumer demand and the price of Bitcoin, related in part to broader uncertainty around crypto assets, which more than offset the benefit of volatility in the price of Bitcoin during the quarter,”
However, Block’s Bitcoin revenue and gross profit increased by 143 % and 168%, accordingly, over a three-year compound annual growth rate (CAGR). Dorsey, a strong proponent of Bitcoin, has made the world’s largest cryptocurrency a top focus on Twitter. Block, formerly known as Square, spent $220 million to purchase 8,027 bitcoin to keep on its balance sheets.
As per Block, the fair value of the company’s Bitcoin investment as of June 30, 2022, was $160 million based on observable market rates. According to CoinMarketCap, the leading cryptocurrency has lost more than 51% of its value since the beginning of the year and is presently trading at $23,190, up about 1% in the last 24 hours.
Other parts of Bitcoin technology in which the company is involved include ambitions to produce a Bitcoin hardware wallet and the formation of a specialized team to manufacture mining rigs.
Block’s second-quarter gross profit was $1.47 billion, with Cash App contributing to nearly 48% of that total. The payments service currently has 47 million active accounts, up from 45 million in the first quarter.
The firm’s total revenue declined by nearly 6% to $4.4 billion in the third quarter, slightly exceeding Wall Street’s projection of $4.3 billion. Barring Bitcoin sales, total net revenue was $2.62 billion, up 34% year-on-year, according to the report. Block shares plummeted over 6% in extended trading on Thursday and are down 6.63% in pre-market trade at the time of writing.
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