Cash App comes off as one of the most dominant channels to buy and transact in Bitcoin, cementing its role as one of the pioneers in the fintech space that adopted the premier cryptocurrency.
The growth of the digital currency ecosystem has been very erratic during the quarter and this became visible in Block’s overall performance with respect to the sales and revenue of the digital currency. Atop the declined total sales, the gross profit coming from the sales of the digital currency was pegged at $43 million when compared to this same period last year.
“Cash App generated $1.73 billion of bitcoin revenue and $43 million of bitcoin gross profit during the first quarter of 2022, down 51% and 42% year over year, respectively. On a two-year CAGR basis, bitcoin revenue and gross profit grew 138% and 155%, respectively,” Block said in its shareholder letter. The company was formerly known as Square Inc and at the time, the firm’s performance was known to be boosted by Bitcoin’s growth.
Since the beginning of the year, the volatility in the price of Bitcoin has kept it within the $48,086.84 and $34,378.04 price ranges respectively. The extreme difference in this range is a conservative addition compared to what the premier coin is known to always print.
The general absence of a massive price upsurge, known as a bull run, notably affected the demand for the cryptocurrency as Block said in the shareholder’s letter.
“The year-over-year decrease in bitcoin revenue and gross profit was driven primarily by relative stability in the price of bitcoin during the quarter, which affected consumer demand and trading activity compared to the prior year period. Bitcoin revenue and gross profit were relatively consistent compared to the fourth quarter of 2021.”
Drawing on this reality, the company said future revenue and profit can also be impacted by these trends in relaxed demand.
Image source: Shutterstock