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10M Cash App Accounts Bought Bitcoin, Jack Dorsey’s Block Boasts

  • Fintech provider Block made 51% less revenue with Bitcoin in the first quarter of 2022 than in the first quarter of the previous year
  • Block blamed the cryptocurrency’s sideways movement for his declining Bitcoin earnings

More than 10 million cash app accounts have bought bitcoin since 2018, according to Jack Dorsey’s fintech firm Block.

“Our focus on expanding our customers’ awareness and access to Bitcoin has enabled us to drive meaningful adoption,” the company, formerly known as Square, wrote in its first-quarter results report Thursday.

Block’s earnings were relatively healthy despite having little to do with Bitcoin. Headquartered in San Francisco, the company generated gross profit of $1.29 billion, up 34% year over year.

Block’s peer-to-peer money platform, Cash App, contributed $624 million to the bottom line. The app and its point-of-sale devices allow users to accept payments in fiat and bitcoin, with a 3% fee.

Earlier this year, Cash App integrated the Lightning Network layer-2 bitcoin scaling solution to accelerate transactions through the service. Payments processed through Lightning are free.

Cash App generated $1.7 billion in Bitcoin revenue for Block last quarter, down 51% year over year. Gross profit fell 42% to $43 million, about 3% of Cash App’s bitcoin revenue.

After excluding bitcoin and its recently acquired buy-now, pay-later service Afterpay, Cash App’s revenue grew 26% year over year to $667 million.

Block said the falling bitcoin earnings and gross profit were the result of the top cryptocurrency’s sideways movement “which hurt consumer demand and trading activity compared to the same period last year.”

The suggestion is that it is not bitcoin volatility that is inspiring users to interact with the cryptocurrency through the Cash App, but rather sustained bullishness.

Bitcoin started the year trading around $47,000 and ended the quarter around the same level. But it was still volatile, bouncing between that level and $37,000 several times during the quarter.

Block noted that based on a two-year compound annual growth rate, bitcoin revenue and gross profit were actually up 138% and 155%, respectively.

“Bitcoin revenue and gross profit were relatively flat compared to Q4 2021,” Block told shareholders. “In future quarters, bitcoin revenue and gross profit may fluctuate due to changes in customer demand or the market price of bitcoin.”

The company said it saw “growing momentum” surrounding its new bitcoin savings service, which debuted in April. It allows US users with enabled cash cards to receive portions of recurring paycheck deposits in BTC with no transaction fee. No specific data was provided.

Block also confirmed that it has not sold any of its massive Bitcoin stash in the last quarter and has not recorded an impairment loss. Dorsey’s firm currently holds 8,027 BTC ($290.3 million), which she acquired in two lots in late 2020 and early 2021.

Block spent $220 million on its Bitcoin treasury, the fourth-largest stash for a public company behind Marathon Digital, Tesla, and MicroStrategy.

That means Block is still around $70 million in the green with its bitcoin purchases — even after the recent monster dip.

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After 10 million cash app accounts buying bitcoin, Jack Dorsey’s Block Brags first appeared on Blockworks.

Source: Crypto News Austria

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