Business: As Bitcoin Rise Fades, Block Misses Profit Projections

Overall, Block’s revenue fell 22% to $3.96 billion in the three months ended March 31. The company earned an adjusted profit of 18 cents per share, falling short of analysts’ estimates of 21 cents, according to IBES data from Refinitiv. But in a bright spot, the company’s Cash App – which lets individuals send payments including in bitcoin – posted a 26% jump in gross profit.

On Thursday, Block Inc, the fintech company led by Twitter founder Jack Dorsey, missed market expectations for first-quarter profit as demand for bitcoin slowed owing to a drop in cryptocurrency prices. After a rapid price increase last year spurred by rising public acceptance of digital currencies, the company’s bitcoin income more than halved in the quarter to $1.73 billion, owing to a dip in interest from regular traders. Bitcoin, the most popular cryptocurrency, has plummeted 21% this year as investors leave risky assets owing to the Russia-Ukraine war and a more hawkish Federal Reserve policy tightening forecast.

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The strong performance was underpinned by higher use of its Cash Card as consumers spent heavily on travel and dining out after two years of the pandemic despite pressure from inflation. Shares of the company were 10% higher in extended trading. Peers American Express Co and Mastercard Inc have posted strong results this quarter on the back of strong consumer spending.

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