Press "Enter" to skip to content

Jack Dorsey’s Block Mints $207M Profit From Bitcoin Investment, Boosted By Cash App’s Appeal Among High Earners

Loading…
Loading…

Block Inc. SQ, the financial technology company led by former Twitter CEO Jack Dorsey on Thursday reported a rise in profits from its Bitcoin BTC/USD sales made through the Cash App.

What Happened: In the fourth quarter of 2023, the company saw a gross profit of $66 million—marking a 90% boost year-over-year.

According to the firm’s shareholder report, Bitcoin sales to customers reached $2.52 billion in the same period, showing a 37% year-over-year increase. “The year-over-year increase in Bitcoin revenue and gross profit was driven by an increase in the average market price of Bitcoin as well as a benefit from the price appreciation of our Bitcoin inventory during the quarter.”

In the span between late 2020 and early 2021, Block made strategic investments in Bitcoin, purchasing $50 million and later $170 million worth of the cryptocurrency. As of the end of 2023, Block’s investment had grown to 8,038 Bitcoins, valued at approximately $340 million. The company currently enjoys a profit gain estimated at $207 million, thanks to the surge in the value of Bitcoin.

Mobile transactions have played a significant role in the company’s earnings, with Block’s mobile Cash App generating a total of $205 million in Bitcoin profits and $9.50 billion in Bitcoin revenue in 2023 alone, seeing a year-over-year rise of 31% and 34%, respectively.

“The biggest driver is going to be easy, connected banking features that just work and that people can trust,” Dorsey said. He emphasizes that trust and reliability are the foundational qualities that should lead people to consider the Cash App as their preferred banking solution.

“Where we’re going to benefit a lot from is the focus on the banking relationships. We’ve proven out the model with the success of the Cash App Card. And it’s really focused a lot of our efforts to bank or base. We see Cash App as the first choice for individuals earning $100,000 or $150,000 to serve as their primary bank,” Dorsey said during the earnings call.

See More: Dogecoin HODLERs Are Beating Shiba Inu With 57% Landing In Profits, IntoTheBlock Data Reveals

Why It Matters: For the fiscal year concluding on Dec. 31, Block observed a sizable 33.54% increase in revenues, surging to $9,498,302 from the $7,112,856 reported the previous year. This rise reverses a previous downward trend where the company’s revenues dropped by 28.96% in 2022.

Post the third-quarter earnings report, Block’s stock jumped 20%, hitting $52 per share, buoyed by the favorable earnings announcement. The company revealed a net revenue of $5.62 billion for the third quarter of 2023, with Cash App contributing $2.42 billion.

Loading…
Loading…

Amrita Ahuja, the COO and CFO of Block, noted in the earnings call, “Improvement from the third quarter was driven by a number of factors, including an increase in Bitcoin gross profit from pricing changes implemented during the quarter.” She further explained the betterment in financial performance, attributing it to strategic pricing and the appreciated value of Bitcoin.

Price Action: At the time of writing, BTC was trading at $51,050, up 0.35% over the past 24 hours, according to the data from Benzinga Pro. Block shares gained over 13% to $76.95 in after-hours trading Thursday.

Read Next: Here’s How Much You Should Invest In Shiba Inu Today For A $1M Payday If SHIB Hits 1 Cent?

Photo by 24K-Production on Shutterstock

Loading…
Loading…

This post was originally published on this site

Be First to Comment

Leave a Reply

Your email address will not be published. Required fields are marked *