Square 's Crypto land scape

 

Dorsey’s case for bitcoin


As of the quarter ended in March, bitcoin still only accounted for roughly 5% of Block’s gross profits. But executives are betting on crypto as a secular trend in which Block could be well positioned. Dorsey described it as the “open standard for global money transmission” and said it will allow Block’s “entire business to move faster globally.”

Block first started offering bitcoin trading through the Cash App, and the company holds it on its balance sheet as an alternative to cash. The world’s largest cryptocurrency is down more than 50% from its high and has struggled to regain its value so far this year.

Block’s crypto businesses have expanded to a bitcoin hardware wallet, a bitcoin-mining business, and an open-source business called TBD for developers. On top of that, there’s an independent, bitcoin-focused business within Block called Spiral.

Dorsey is not as bullish on other cryptocurrencies and said the “internet requires a currency native to itself, and looking at the entire ecosystem of technologies to fill this role, it’s clear that bitcoin is currently the only candidate.”

Still, Block’s CFO, Ahuja said the company is outperforming its peers on profitability. Block released updated profit margins Wednesday — an increasingly important metric as investors prioritize the bottom line over growth.

Adjusted profit margins for the Square side of the business last year were 34%, and they were 12% for Cash App, according to the company. On the pure-growth side, Cash App now has 46 million monthly active users and 80 million annual actives as of March.