Block’s Cash App Sees Bitcoin Sales Soar In Q1
- Block claimed record Bitcoin sales on its Cash App platform in the first quarter of the year.
- The business claimed it sold $2.2 billion in bitcoin during the quarter, a 25% rise year on year.
- This is an increase above the $1.8 billion sold in the fourth quarter of the previous year.
Block (previously Square), the digital payments company run by Jack Dorsey, revealed on Thursday a 25% year-over-year rise in Bitcoin sales on Cash App, one of its main products.
According to the earnings statement, the business sold $2.2 billion in Bitcoin during the quarter, a 25% rise year over year. According to the Q1 shareholder letter, gross income from Bitcoin sales was $50 million.
However, Block’s revenue from Bitcoin sales was insignificant when compared to the company’s total gross profit, which also includes the popular business platform Square. Block’s gross profit in the first quarter of 2023 was $1.71 billion, although it only generated $50 million from Bitcoin sales at the same time, representing a 16% year-over-year gain.
According to Block’s shareholder letter, the increase was caused by an increase in the amount of Bitcoin supplied to clients, partly offset by a fall in the market price of Bitcoin. It recorded $1.83 billion in Bitcoin sales in the previous quarter, a 7% fall year on year.
Block has made investments in areas outside of its main payments business, most notably Bitcoin. Last month, the company purchased a large volume of semiconductors from IntelI, which it plans to use to accelerate a program to manufacture Bitcoin mining equipment aimed at encouraging new entrants into the industry. In addition, the company is aiming to develop its own chips. This category of long-term ecosystem investments includes Block’s acquisition of rapper Jay-music Z’s streaming service Tidal.
“Our real value comes from our multiple ecosystems working to positively reinforce one another and provide resiliency through challenging times,” CEO Jack Dorsey said to Forbes.
Cash App earnings were $931 million, while Square profits were $770 million, reflecting 49% and 16% year-on-year gains, respectively.
The strong earnings statement for Block is a breath of fresh air for its management, who have been battling to escape the shadow cast by a devastating study issued in late March by short-seller Hindenburg Research.
Among other charges, the activist investment group, well known for undervaluing India’s biggest corporation, alleged Block deceived investors on crucial metrics and turned a blind eye to criminals using Cash App. Following the publication of the report, the company’s stock dropped by more than 20%.
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