Former Twitter CEO Jack Dorsey’s digital payments firm, Block Inc., registered a $1.9 billion profit in the second quarter of 2022 despite the ongoing turmoil within the crypto market. Revenue from Bitcoin services, however, dropped and only accounted for about $41 million of the overall profit.
The firm cited price volatility and lack of consumer demand for the reduced revenue from Bitcoin compared to past years.
The Q2 report showed that the digital payment firm saw its year-to-year profits climb by about 29%. This comes amid the reduced Bitcoin business.
Block Inc. Bitcoin business
Block Inc. generates Bitcoin revenue primarily from BTC trading services through its digital payment application Cash App. The reduced gross Bitcoin gross profit suggests that Bitcoin could be a high-cost venture for the digital payments firm.
Commenting about the reduced Bitcoin revenue, Block Inc. stated:
“The year-over-year decrease in Bitcoin revenue and gross profit was driven primarily by a decline in consumer demand and the price of bitcoin, related in part to broader uncertainty around crypto assets, which more than offset the benefit of volatility in the price of Bitcoin during the quarter.”
The Block also realized a $36 million impairment loss on its BTC holdings, although that is just a loss on paper.
The firm was, however, quick to emphasize that the slump in Bitcoin profits does not reflect the broader performance of the firm’s business.
Following Block’s Q2 performance, investors seem to be quite impressed despite the fact that the firm’s stock dropped by over 7% in the after-hours trading.
