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Holding Bitcoin Paid Block 4x More Than Selling It to Cash App Users
Block reported a $229.7 million gain on Bitcoin holdings in the third quarter, more than four times the $52 million gross profit from its Bitcoin business. Overall gross profit rose 22% to $3.24 billion, with payments and lending providing all of the growth.
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What happened
Block reported a $229.7 million gain on Bitcoin holdings in the third quarter, more than four times the $52 million gross profit from its Bitcoin business. Overall gross profit rose 22% to $3.24 billion, with payments and lending providing all of the growth.
Confirmed
Global impact / market context
The figures show Block’s Bitcoin holdings generated a much larger reported gain than its Bitcoin sales business earned, but the two are different sources of value. Meanwhile, lending and card spending grew, while a fee cut reduced Bitcoin profit per sale.
Analyst inference
Block’s quarter was not driven by every business line equally: lending and commerce grew, while Bitcoin gross profit fell 50% year over year. That mix matters because lower transaction fees can reduce revenue retained from each sale even when customers trade more.
Analyst inference
What to watch
- Whether Block’s lending growth continues: Cash App loan originations, including Borrow and Afterpay, rose 40% to $19 billion in the quarter. Confirmed
- Whether the Bitcoin fee cut continues to weigh on earnings, or higher customer trading activity offsets the smaller share Block keeps from each sale. Analyst inference
- Whether card spending remains a key profit source, as Commerce Enablement gross profit rose 19% to $1.85 billion in the third quarter. Confirmed
Affected assets
- BTC — Bitcoin