Bitcoin revenue is up from the same quarter last year, as has earnings.
The company has not mentioned any plans to expand into other cryptocurrencies.
Cash App – the popular mobile payment service developed by Block (formerly Square) – has become a very popular way to buy Bitcoin. According to today’s earnings report, the company generated $1.96 billion in bitcoin revenue during the fourth quarter of 2021.
This number comes from page 10 of earnings report, which states that Block generated $4.08 billion in net revenue during the fourth quarter. The company says it has $2.12 billion in revenue “excluding Bitcoin,” which means nearly half of the company’s inflows have been thanks to its Bitcoin Cash App purchase service. This is a 12% increase in bitcoin’s revenue year-over-year.
However, only 2% of that revenue translated into profits for Block. The percentage is roughly equal to the transaction fee that Block charges an average Bitcoin purchase. This brought in profits of $46 million for the company.
Throughout the entire year of 2021, the Cash App reported just over $10 billion in bitcoin revenue and $218 million in total profits from selling the coin, up 119% and 124%, respectively, over the previous year. The company cites the rising price of Bitcoin as the primary driver of the increase, along with the growth of active Bitcoin users. However, 2022 tells a different story so far, with the bitcoin price remaining below $40,000 and active addresses in drop.
The asset’s poor performance since it touched $69,000 in November has been a bad outlook for Block’s budget as well. After buying $50 million of Bitcoin in the fourth quarter of 2020, and another $170 million in the first quarter of 2021, the company was forced to report $71 million. Impairment losses for the year.
The Cash App started allowing users to buy and sell Bitcoin with their balances in 2017. However, the company refused to allow access to other cryptocurrencies such as Ethereum or Dogecoin since then.
This is likely due to Block CEO Jack Dorsey rejecting other cryptocurrencies in favor of Bitcoin. Dorsey publicly criticized Ethereum and, more broadly, Web3 – a concept of a decentralized Internet built on blockchain technologies – as central project controlled by the owners of capital.