Block, Inc. Reports 37% Increase in Bitcoin Revenue in Q3 2023
Block, Inc., led by Jack Dorsey, has experienced a significant surge in Bitcoin revenue during the third quarter of 2023. The company’s Bitcoin revenue reached $2.42 billion, marking a 37% increase compared to the same quarter last year when it reported $1.77 billion. Alongside this growth, Block also saw a 22% rise in Bitcoin gross profit, from $37 million in Q2 2022 to $45 million in Q3 2023.
Factors Driving Revenue Growth
The increase in revenue can be attributed to two main factors. Firstly, there has been a higher average market price of Bitcoin during this period. Secondly, Block’s Cash App has experienced a spike in the volume of Bitcoin sold. These factors indicate strong customer demand within Block’s ecosystem.
Appreciation in Bitcoin Holdings
In addition to the revenue growth, Block has seen an appreciation in its corporate treasury’s Bitcoin holdings. Despite cumulative impairment charges, the carrying value of its Bitcoin investment reached $102 million, while the fair value rose to $216 million based on current market prices. This indicates a surplus of $114 million over the carrying value.
New Accounting Rules for Crypto Valuation
The disparity between carrying value and fair value arises from accounting conventions that only account for decreases in asset price but not for increases. However, recent accounting rule endorsements by the Financial Accounting Standards Board advocate for reporting crypto at fair market value, which will bring more transparency to such valuations.
Hot Take: Block, Inc. Sees Impressive Growth in Bitcoin Revenue
Block, Inc., led by Jack Dorsey, has reported a significant increase in Bitcoin revenue, showcasing the company’s strong performance in the cryptocurrency market. With a 37% surge in Q3 2023, reaching $2.42 billion, Block is capitalizing on the higher average market price of Bitcoin and increased volume sold through its Cash App. The appreciation in its corporate treasury’s Bitcoin holdings further adds to its success. However, the disparity between carrying value and fair value highlights the need for new accounting rules to accurately reflect asset valuations. With the endorsement of reporting crypto at fair market value, Block and other companies will benefit from increased transparency and more accurate financial reporting.
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