Jack Dorsey-led Block posts $1.5B in Q2 profits, BTC revenue down

cointelegraph.com:

Former Twitter CEO Jack Dorsey’s digital payments firm Block Inc. saw its year-on-year (YoY) profits soar 29% to $1.47 billion in Q2, though its Bitcoin business slumped on decreased customer demand and a fall in Bitcoin (BTC) prices.

The financial services firm primarily generates Bitcoin revenue by providing BTC trading services via its digital payments application Cash App.

Block Inc. noted the business generated $1.79 billion of Bitcoin revenue in the quarter, down 34% YoY, while Bitcoin gross profit was only $41 million, which suggests it may be a high-cost venture to provide Bitcoin services to its customers.

Block Inc. said the fall in Bitcoin revenue was attributed to “broader uncertainty” in crypto assets, stating:

However, Block Inc. emphasized that the BTC profit slump doesn’t reflect the broader performance of the business. It also noted that BTC profits will likely fluctuate over time as a result of “changes in customer demand or the market price of Bitcoin.”

The company also noted that it recognized a $36 million impairment loss on its BTC holdings, however this is likely just a loss on paper.

Under U.S. accounting procedures, crypto is classified as an intangible asset on balance sheets and companies must report a loss when the price of the asset drops below its cost basis, even if a gain or loss has been realized through a sale during the given quarter.

The company noted that as of June 30, 2022, the fair value of its investment in Bitcoin is $160 million based on market prices.

Related: Interview with Kevin O’Leary: $28K Bitcoin next or lower? | Market Talks with Crypto Jebb

Investors appear un-impressed with Block Inc.’s performance in Q2 however, as the firm’s stock SQ has dipped by 7.42% in after-hours