Block Q2 Bitcoin Gross Profit Falls 31% on Lower Cash App Fees

Jack Dorsey-led fintech company Block reported a 31% decline in second-quarter gross profit from its Bitcoin business as lower transaction fees and weaker trading volume weighed on results.

According to The Block on August 5, revenue from Block’s Bitcoin business fell 13% to $1.89 billion in the second quarter from $2.17 billion a year earlier. Gross profit dropped to $72 million from $105 million over the same period.

Block said the decline was mainly due to a strategic decision to cut some Bitcoin transaction fees on Cash App and a broader slowdown in Bitcoin trading this year. Cash App accounted for $1.81 billion of the Bitcoin business’s revenue in the quarter.

The company’s results were also hit by losses on its Bitcoin holdings. Block recorded an $88.5 million unrealized loss in the second quarter as the value of its Bitcoin fell, compared with an unrealized gain of $212.2 million a year earlier.

As of May, Block held 9,032 Bitcoin on its corporate balance sheet. That was up 35 Bitcoin from 8,997 Bitcoin at the end of the first quarter and was worth about $586 million at current prices.

Block’s overall business performance improved. Second-quarter gross profit rose 25% from a year earlier to $3.17 billion, and the company raised its full-year gross profit forecast to $12.51 billion on growth in its Cash App and Square businesses.

Block also said it added support for USD Coin, or USDC, to Cash App in the second quarter, allowing users to send and make payments with the stablecoin across multiple blockchains.