Cash App, Block’s (previously Square) renowned mobile payment service, has become a popular way to buy Bitcoin. According to today’s earnings release, Bitcoin revenue totaled $1.96 billion in the fourth quarter of last year.
Block earned $4.08 billion in net revenue in Q4, according to page 10 of the earnings release. According to the company, it made $2.12 billion in revenue “without Bitcoin,” which means Cash App’s bitcoin purchasing service accounted for roughly half of the company’s inflows. Bitcoin revenue has increased by 12% year over year.
However, Block only profited from 2% of that income. The proportion is around the same as Block’s transaction fee on a typical Bitcoin buy. For the corporation, this resulted in a $46 million profit.
Cash App claims well over $10 billion in Bitcoin sales and $218 million in gross profit from selling the coin for the entire year of 2021, up 119 percent and 124 percent over the previous year, respectively. Bitcoin’s price appreciation, together with the increase in active Bitcoin users, is cited as the main driver for the increase by the corporation. However, thus far in 2022, the price of Bitcoin has remained below $40,000, and active addresses have decreased.
Block’s balance sheet has taken a hit as a result of the asset’s poor performance since it peaked at $69,000 in November. The corporation was obliged to disclose a $71 million impairment loss for the year after purchasing $50 million of Bitcoin in Q4 2020 and another $170 million in Q1 2021.
In 2017, Cash App launched a feature that allows users to buy and sell Bitcoin using their existing balances. Since then, however, the corporation has refused to accept other cryptocurrencies such as Ethereum or Dogecoin.
This is most likely due to Block CEO Jack Dorsey’s unwavering support for Bitcoin over other cryptocurrencies. Dorsey has blasted Ethereum and, more broadly, Web3, the vision of a more decentralized internet based on blockchain technologies, as a centralized project controlled by venture capitalists.