More than 10 million people have now bought Bitcoin using Jack Dorsey’s CashApp, according to Block’s Q1 2022 shareholder letter. The app generated $624 million in gross profit for the company over that time, $43 million of which came from Bitcoin sales.
Expanding Bitcoin Access
The company states that it is focused on expanding awareness and access to Bitcoin among its customers, in order to bolster the network’s adoption. Block Head Jack Dorsey – who stepped down as CEO of Twitter in May – is very bullish on Bitcoin becoming the world reserve currency.
In April, CashApp announced its integration with the lightning network, granting customers access to immediate and free Bitcoin transactions. It also announced its new “Get Paid in Bitcoin” feature, which converts its customers’ recurring paychecks into Bitcoin automatically.
“We have experienced growing momentum with customers bringing their paychecks into Cash App, and hope this feature will expand awareness of our direct deposit capabilities,” reads the report.
Nearly half of Block’s net revenue ($3.96 billion in Q1) technically came through Bitcoin purchases ($1.73 billion). However, this revenue is mostly discounted as only 3% of it resulted in gross profit for the company, with the rest going back to the customer.
The distinction is important: the company’s net revenue decreased by 22% YOY when including Bitcoin, but increased by 44% YOY when not. This indicates a drastic decrease in Bitcoin revenue overall, likely driven by the contrasting bull and bear market between Q1 2021 and 2022.
Block added Bitcoin to its own balance sheet through Q4 2020 and Q1 2021, in batches of $50 million and $170 million respectively. This quarter, Block did not suffer an impairment loss on those holdings, since the fair value of its Bitcoin rested at $366 million as of March 31st, 2022. However, Bitcoin’s price has declined drastically since that time.
Bitcoin Only for Jack Dorsey
In a recent interview with CNBC, Jack re-iterated his thesis that Bitcoin is the only candidate worthy of being the native currency of the internet.
By contrast, the billionaire has dismissed working on any other cryptocurrencies at Block, such as Ethereum. He believes that Bitcoin alone is more than capable of scaling and higher functionality on its own.
His company is currently building a decentralized Bitcoin exchange, as well as a global Bitcoin mining system.