In brief
- Bitcoin revenue is up from the same quarter last year, as are profits.
- The company hasn’t mentioned any plans to expand to other cryptocurrencies.
Cash App—the popular mobile payment service developed by Block (formerly Square)—has become a highly popular vehicle for purchasing Bitcoin. According to a earnings report today, the company accrued $1.96 billion in Bitcoin revenue during the fourth quarter of 2021.
That figure comes from page 10 of the earnings report, which states that Block generated $4.08 billion in net revenue throughout Q4. The company says it had $2.12 billion in revenue “excluding Bitcoin,” meaning nearly half of the company’s inflows were thanks to Cash App’s Bitcoin purchasing service. That’s a 12% increase in Bitcoin revenue year-over-year.
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That said, only 2% of those revenues actually translated into profits for Block. The percentage is roughly equal to the transaction fee that Block charges on the average Bitcoin purchase. This garnered $46 million in profit for the company.
Throughout the whole of 2021, Cash App reports just over $10 billion in Bitcoin revenue and $218 million in gross profit from selling the coin, up 119% and 124%, respectively, from the previous year. The company cites Bitcoin’s price appreciation as a primary driver for the increase, alongside the growth of active Bitcoin users. However, 2022 tells a different story so far, with Bitcoin’s price stuck below $40,000 and active addresses on the decline.
The asset’s poor performance since touching $69,000 in November has been a bad look for Block’s balance sheet as well. After purchasing $50 million of Bitcoin in Q4 2020, and another $170 million in Q1 2021, the company was forced to report a $71 million impairment loss for the year.
Cash App started allowing users to buy and sell Bitcoin with their balances in 2017. However, the company has refused to allow access to other cryptocurrencies like Ethereum or Dogecoin since then.
This is likely due to Block CEO Jack Dorsey’s firm rejection of other cryptocurrencies in favor of Bitcoin. Dorsey has publicly criticized Ethereum and, more broadly, Web3—the concept of a more decentralized internet built on blockchain technologies—as a centralized project controlled by venture capitalists.
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