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

August 5, 2022 Coin Telegraph

Jack Dorsey-led Block posts .5B in Q2 profits, BTC revenue down

Block Inc.

Block Inc. posted $1.47B worth of profit in Q2 but BTC trading services profit only accounted for $41 million of that figure, with the firm citing price volatility and a lack of consumer demand.

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:

“The year-over-year decrease in Bitcoin revenue and gross profit was driven primarily by a decline in consumer demand and the price of bitcoin, related in part to broader uncertainty around crypto assets, which more than offset the benefit of volatility in the price of Bitcoin during the quarter.”

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.

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 trading to sit at $83 at the time of writing.

Bloomberg suggested this was due to the company reporting lower than expected transaction volume at $52.5 billion, as opposed to the estimated $53.47 billion.

Bitcoin from the Block

Dorsey, the fervent Bitcoin maxi, has been relatively quiet about his plans for digital gold since announcing that Block Inc. was bypassing the Web3 model to build the Bitcoin blockchain-focused Web5 project in June.

Web5 is essentially a decentralized web platform, or DWP, that allows developers to create decentralized web apps via DIDs and decentralized nodes, which will also have a monetary network built around BTC, and not smart contract backed tokenization.

nah pic.twitter.com/RTHLWYjY0L
— jack (@jack) June 16, 2022

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Jack Dorsey and Jay-Z collaborate on Bitcoin Brooklyn educational program

June 9, 2022 Coin Telegraph

Cash App

The Shawn Carter Foundation and Cash App will provide informative seminars and classes on Bitcoin to specific New York City residents this summer.

Legendary New York hip-hop artist and producer, Jay-Z has joined forces with the founder of Cash App, Jack Dorsey, to launch ‘The Bitcoin Academy’, an educational programme advocating for the democratic vision that “education is power.”

Exclusively available for residents of the Marcy Project public housing complex in New York City, the scheme will commence June 22 and run until September 7 with options for both in-person and online attendance. The free educational programme is designed to enhance access to financial information and promote inclusive opportunities.

Taught by educators Lamar Wilson of the Black Bitcoin Billionaire, and Najah J. Roberts of the Crypto Blockchain Plug, the specific details of the lessons are sparse at this time, but topics surrounding the necessity, utility, and vision for Bitcoin, as well as general financial literature are all expected.

Children aged 5-17 have also been encouraged to join the 'Crypto Kids Camp' on two of the Saturday events, while adult attendees will receive a portable WiFi hotspot device, a one-year limited data plan, as well as a smartphone if required.

Mr @sc and I are funding The #Bitcoin Academy, a program for residents of Marcy Houses in Brooklyn New York where Jay grew up, designed in collaboration with @CryptoPlug3 and @BlkBTCBillions: https://t.co/hKfq1jqii7
— jack (@jack) June 9, 2022

Dorsey said he was inspired by the results of Bitcoin initiatives that have supported a small-section of African and Central and South American populations. He stated that the overarching goal is “to prove that making powerful tools more available to people enables them to build greater independence.”

Settling potential fears of favoritism, or maximalism towards the leading cryptocurrency asset, Dorsey expressed that the programme aims to go beyond the teaching of Bitcoin to conversations surrounding “long-term thinking, local economies, and self-confidence.”

Dorsey and Jay-Z — personal name Shawn Carter — are both vocally conscious figures within the cryptocurrency and Web3 landscape. The former has made strides in spotlighting crypto across Block and Cash App, while Carter is synonymous with his CryptoPunk avatar and passion for artistic autonomy on the blockchain.

The duo co-own a multi-million-dollar music record label called Tidal, which hinted at a desire to integrate NFTs onto its streaming service last year.

Cathie Wood’s Ark Invest dumps PayPal favoring Bitcoin-friendly Cash App

April 11, 2022 Coin Telegraph

Ark Invest

Wood believes that Venmo is merely a follower of Cash App, which has generated more than double Venmo’s revenue from almost half the number of users.

Crypto investment company Ark Invest founder, Cathie Wood, has dumped all of the firm’s holdings of PayPal and showed greater confidence in the long-term growth of the Cash App payment system which uses the Bitcoin Lightning Network.

Wood explained her firm’s move at the Miami Bitcoin 2022 conference which wrapped up on April 9.

The Lightning Network (LN) is a layer-2 solution for Bitcoin meant to facilitate faster and cheaper transactions. Financial technology company PayPal operates the payment app Venmo as a direct competitor with Block’s (formerly Square) Cash App.

“@ARKInvest has sold, completely got out of Paypal, whose Venmo is a big competitor to Cash App.

(Cash App has) much more conviction - especially when it comes to bitcoin.” pic.twitter.com/mUGkdWGMFX
— Miles Suter (@milessuter) April 10, 2022

Wood said in an interview with CNBC on April 8 that she made the decision to drop PayPal for Cash App due to its more comprehensive approach toward digital asset wallet integration. She said that although Venmo has begun to accommodate Bitcoin (BTC), “it’s more of a follower of Cash App.”

“We tend to put our bets with who we believe will be the winners… As we consolidated our portfolios during a risk-off period, we chose Block over PayPal.”

Wood continued that her firm’s conviction in Cash App stems from what she perceives to be the organically-driven growth in users “as opposed to more of a top-down approach” from Venmo.

In general, Wood believes retail investors have driven the crypto market up to this point as she stated:

“I don’t think most institutional investors are positioned the way they ultimately will be. Retail has really led the charge here.”

Venmo currently boasts 70 million users and $850 million in profit compared to Cash App’s 44 million and $2.03 billion in profit in 2021 according to data from app tracker Business of Apps. The stark contrast in their ability to net profits could be another motivating factor for Ark’s assessment of the two brands.

As Ark Invest has taken a bullish stance on Cash App, its Bitcoin product lead Miles Suter announced on April 7 that American users would be able to automatically invest a portion of their direct deposits into Bitcoin.

Wood is a big Bitcoin believer who repeated her prediction in the interview that BTC would hit $1 million by 2030.

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Mobile banking app Dave scores $100M investment from FTX US

March 22, 2022 Coin Telegraph

Mobile banking app Dave scores 0M investment from FTX US

Cash App

Dave is the latest in a series of fintech payments apps to offer crypto services, following PayPal, Venmo, and Cash App.

On March 21, mobile banking application Dave announced a partnership with FTX US to provide cryptocurrency payments on the platform. It also announced a $100 million investment from FTX Ventures.

In the statement, Dave said the investment would aid its strategy for future crypto-related initiatives, with FTX US serving as its partner for cryptocurrencies. Both companies said they’re currently exploring ways to introduce crypto payments into Dave’s platform.

FTX US President Brett Harrison commented that it looks to align with companies that can help drive widespread adoption of digital assets, believing Dave was a fit in that regard. Jason Wilk, Chief Executive Officer of Dave, expressed his views on the technology.

“We believe blockchain technology has the potential to level the financial playing field across the globe. By aligning with a world-class leader such as FTX US, we are in position to enter the digital asset arena, explore new growth opportunities, and improve the member experience.”

Launched in January, FTX Ventures is the investment arm of FTX. It has a $2 billion fund to provide funding and support to companies in or interested in the crypto space, and states its mission is to “advance global blockchain and web3 adoption”.

Dave is a fintech app based in the U.S. with over 6 million members, it provides users with a budgeting and credit building product, and a cash advance service.

Dave is the latest in a series of payments apps looking to move into offering crypto services. Last March, PayPal rolled out support for crypto, and as recently as January, it intended to launch its own stablecoin. Venmo, owned by PayPal, also expanded support for crypto last August, allowing its credit cardholders to receive “cash back” rewards in cryptocurrencies.

Recently, PayPal changed its fee structure for crypto transactions across Venmo, and its own app, moving away from percentage based fees, and introducing a flat-fee structure for crypto transactions under $200.

In February, Cash App, a mobile payment service founded by Bitcoin maxi and Twitter Co-founder, Jack Dorsey, revealed that the Lightning Network could be used to transfer Bitcoin through its app to anyone with a BTC address.