Cash App’s Bitcoin Revenue Surpasses $2 Billion In First Quarter• May 5, 2023 2:07 pm • Comments
Bitcoin and digital assets are increasingly becoming a profitable business venture for many companies that are involved in the growing industry.
Block just reported that they achieved a 25% increase in Bitcoin revenue compared to last year and that the revenue had surpassed $2 billion in just the first quarter.
These are astonishing numbers compared to the revenue only a few years ago which is a testament to the amount of adoption that has been achieved since then.
The increase in Bitcoin revenue can be primarily attributed to a larger amount of Bitcoin that has been sold to customers indicating growing demand.
This happened despite the stagnating price of Bitcoin during this particular time period.
— CryptoSavingExpert ® (@CryptoSavingExp) May 5, 2023
Cash App’s total profits reached over $931 million in the first quarter of 2023, marking a 49% increase year-over-year.
Notably, Cash App’s profit paled compared to the company’s gross profit, which came in at $1.71 billion. Block also owns the popular business payment service Square, which reported a slight (3.8%) decline in profits from the fourth quarter of 2022.
According to the shareholder letter, the multi-billion-dollar Bitcoin revenues were driven by “an increase in the quantity of Bitcoin sold to customers,” and were “partially offset” by a decrease in the market price of Bitcoin, compared to the same timeframe in 2022.
The fintech firm also reported an earning per share of 40 cents, beating analyst expectations of 35 cents per share by 14%, with its first-quarter revenue rising 26% year-on-year.
Block had also previously announced that it will provide support for the Lightning network which may have contributed to the recent boost in revenue.
As more and more companies integrate digital assets as part of their platforms and operations, it is expected that the value of the assets will go up.
Currently, Block also holds a $229 million investment in Bitcoin as of March 2023 which makes it one of the companies that hold a significant stake in crypto.
This is similar to MicroStrategy where the price of BTC may heavily affect the valuation of the company itself.
Bitcoin sales on Cash App surged to $2.2 billion in Q1, Block says https://t.co/Pt3IwUSRby
— The Block (@TheBlock__) May 4, 2023
As of March 31, 2023, the fair value of the company’s investment in Bitcoin was $229 million, or “$126 million greater than the carrying value of the investment after cumulative impairment charges.”
“The accounting rules for Bitcoin currently require us to recognize any decreases in market price below carrying value as an impairment charge, with no upward revisions recognized when the market price increases until the sale of that Bitcoin,” said the company, adding that it revalues its Bitcoin holdings on a daily basis using the closing price at midnight Coordinated Universal Time (UTC).
Block’s shares (SQ) changed hands at $60.43 at the closing bell on Thursday, up 1.87% over the day, jumping almost 5% to $63.35 in Friday’s pre-market trades.
— Satoshi Club (@esatoshiclub) May 5, 2023
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