Block's Bitcoin Ecosystem Suffers Sharp Decline in Q2
Block's Bitcoin Ecosystem saw a significant drop in gross profit, plummeting by 31% to $72 million in the second quarter. This decline is starkly contrasted with Block's overall total profits, which rose by 25%. The company attributed this margin squeeze to lower fees and trading dynamics, but did not quantify either factor's contribution.
The gross-profit compression of 102 basis points translates to about $38.20 of profit per $1,000 of revenue, a sharp decline from the previous year's $48.40. In dollar terms, revenue declined by roughly $278 million while gross profit fell by around $33 million.
Cash App had previously announced on February 9 that it would lower transaction fees and remove fees and spreads entirely for bitcoin buys over $2,000. However, the company did not provide an end date for this policy change.