Jack Dorsey’s Block Reports $1.5 Billion Profit in Second Quarter

Block CEO Jack Dorsey reports second-quarter profit increased 29% year-over-year to $1.47 billion. However, the digital payments company’s bitcoin business has recorded a decline following a decline in demand and a sharp drop in the bitcoin price.

Block Reports $1.5 Billion Profit in Second Quarter 2022

According to Block, bitcoin revenue was $1.79 billion in the second quarter, down 34% year-on-year. Bitcoin’s total profit, on the other hand, is only $41 million, suggesting that it is costly to offer Bitcoin services to customers.

Block primarily generates Bitcoin revenue by providing Bitcoin trading services through its Cash App. The financial services firm said Bitcoin’s decline in earnings was due to widespread uncertainty in the digital asset market.

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According to the company, the year-on-year decline in bitcoin revenue and gross profit is mainly due to low demand and falling bitcoin prices due to uncertainty in the cryptocurrency industry.

Meanwhile, Brock said the slump in the bitcoin business did not reflect the performance of the broader cryptocurrency market. The company added that bitcoin profits are likely to fluctuate over time as businesses adapt to changing customer demand and bitcoin price volatility.

The company also said it reported an impairment loss of $36 million on its bitcoin holdings. However, the company likely does not sell Bitcoin, so this could be a loss on paper.

In the United States, accounting standards require cryptocurrencies to be classified as intangible assets in financial reporting. A company must report a loss after an asset’s price drops below its cost base, even though a gain or loss was realized after the sale during the quarter.

Block also reported that as of June 30, 2022, the fair value of its Bitcoin investment was $160 million at current market prices. Meanwhile, investors weren’t impressed with Block’s second quarter performance as the company’s stock fell 7.42% of his.

Block bitcoin support

Dorsey is known to be a bitcoin proponent, but has been less vocal about Block’s bitcoin plans. Block said it will create a blockchain-based Web5 project for Bitcoin in June.

Web5 is a distributed web platform that supports developers who want to launch distributed web apps via DID and distributed nodes. Block’s Web5 initiative also includes a currency network built around Bitcoin.

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Jack Dorsey’s Block Reports $1.5 Billion Profit in Second Quarter

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