Jack Dorsey’s payments company Block generated $50 million in Bitcoin profits in the first quarter of 2023, up 16% compared to the same period in 2022, the company said in a shareholder letter.
In its latest earnings report for last quarter, Block reported the sale of Bitcoin worth $2.16 billion to its customers through the Cash App in the previous quarter, up 25% year-over-year from $1.83 billion in Q1 2022.
While Bitcoin revenue was relatively consistent compared to the fourth quarter of 2022, when it generated roughly $35 million, Block attributed the year-over-year increase to the surging prices of the leading cryptocurrency.
The San Francisco company stresses it only takes a small margin selling bitcoin to customers on Cash App, Block’s popular payment service.
According to the company, “the year-over-year increase in Bitcoin revenue and gross profit was driven by an increase in the quantity of Bitcoin sold to customers, partially offset by a decrease in the market price of Bitcoin compared to the prior-year period.”
Overall, Cash App’s total profits, including crypto proceeds, was $931 million, an increase of 49 percent year over year.
Square founder and CEO, Jack Dorsey, one of bitcoin’s foremost proponents, has repeatedly shared his enthusiasm for digital currencies, saying it provides an “opportunity to get more people access to the financial system.” He went further than most by calling bitcoin “a transformational technology” and it will be the world’s single currency in 10 years.
Cash App made headline in late 2022 when it added a layer-2 payment protocol Lightning Network to help users transact with bitcoin, nearly three years after it initially announced it will do so.
The feature was rolled out secretly earlier last year to a handful of users. At the time, the company didn’t issue any official notice, but some Cash App users reported that the Lightning functionality is already available on the platform. They shared screenshots on Twitter that they were able to use the feature transfer or withdraw Bitcoin in a matter of seconds with much lower fees.
With the official launch to the broader user base, Cash App customers can send or receive payment of up to $999 in Bitcoin every seven days using the Lightning Network.
San Francisco-based Block (formerly Square) jumped on the cryptocurrency bandwagon back in 2019 when it rolled out Bitcoin trading to its Cash App customers. Furthermore, it holds a so-called BitLicense by the New York State Department of Financial Services (NYDFS), and now legally operates as a money transmitter and digital currency exchange. Block also owns TBD54566975, a blockchain aggregator for decentralized crypto exchanges.
