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Bitcoin Crash, Weak Demand Pull Down Jack Dorsey's Cash App Crypto Profit By 12% In Q3

Jack Dorsey-led Block Inc’s SQ Cash App generated $37 million of Bitcoin gross profit in the third quarter of 2022, where its overall gross profit came in at $783 million. 

What Happened: This implies Bitcoin contributed nearly 4.7% to Cash App’s gross profit in the third quarter.

On a year-over-year basis, Cash App’s Bitcoin gross profit declined 12% while the total amount of Bitcoin sold to customers, which the company recognizes as Bitcoin revenue, was $1.76 billion — down 3% on a year-over-year basis, according to the company’s earnings release.

“Bitcoin revenue and gross profit were relatively consistent compared to the second quarter of 2022,” said Block. 

In the second quarter, Block said the Cash App generated $1.79 billion in Bitcoin revenue and $41 million in gross profit.

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Why It Matters: “The year-over-year decrease in bitcoin revenue and gross profit was driven primarily by declines in consumer demand and the price of bitcoin,” said the company.

Bitcoin BTC/USD has fallen 57.4% in value since the year began. At the time of writing, it was trading at $20,329.15.

Block’s Bitcoin holdings amount to 8,027 coins worth $163.15 million, according to CoinGecko data. The company recognized a Bitcoin impairment loss of $2 million on its investment, according to its earnings statement.

Block’s third-quarter revenue rose 17% year-over-year to $4.52 billion beating average analyst estimates of $4.5 billion, according to Benzinga Pro.

Earnings per share came in at $0.42 beating the estimated EPS of $0.24, according to data from Benzinga. 

Price Action: Block shares closed 1.7% higher at $61.26 in the regular session and rose nearly 0.1% in the after-hours trading.

Read Next: Coinbase Sees More Headwinds In 2023, ‘Low Revenue’ For Multiple Years

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