Block's bitcoin profit falls after Cash App fee cuts while stablecoin support expands
The fintech's bitcoin ecosystem gross profit dropped 31% in the second quarter, even as total company profit rose and Cash App added USDC transactions across multiple chains.
Block's bitcoin ecosystem generated $1.89 billion in second-quarter revenue, but gross profit fell 31% year over year to $72 million. The fintech attributed the drop to lower Cash App fees on some bitcoin transactions and a slower trading environment during 2026. The quarterly results showed revenue down 13% from a year earlier but up 5% from the first quarter.
Cash App supplied $1.81 billion of the segment's revenue, making the fee decision economically visible even as the broader app grew. Block's total gross profit rose 25% to $3.17 billion, with Cash App gross profit up 31% to $1.97 billion and Square gross profit up 13% to $1.16 billion.
A deliberate margin trade
The bitcoin result reflects a choice about distribution rather than a collapse in the product's top line. Block lowered some transaction fees to make Cash App more competitive, accepting less gross profit per bitcoin dollar while hoping the wider payments relationship becomes more valuable.
That strategy is difficult to judge from one quarter. A lower fee can increase activity, but it can also reduce the revenue available to cover compliance, custody and market-risk costs. Block's bitcoin revenue rose from the first quarter, yet the profit decline shows that volume alone did not offset the pricing change.
Bitcoin still affects the parent company
Block recorded an $88.5 million paper loss on its bitcoin holdings as the asset's value declined during the quarter, compared with a $212.2 million paper gain a year earlier. The company held 9,032 BTC as of May 8, about 35 BTC more than at the end of the first quarter.
The accounting loss helped pull net income down to $89 million from $538 million a year earlier. It does not represent a cash sale, but it shows why bitcoin can change the reported earnings of a payments company even when its customer-facing trading business is growing.
USDC adds another crypto rail
Block also discussed its rollout of USDC support in Cash App, allowing customers to transact with the stablecoin across multiple blockchains. That gives the app a second crypto use case beyond buying and selling bitcoin: dollar-denominated transfers that may be less sensitive to the asset's market cycle.
The company raised its full-year gross-profit outlook to $12.51 billion and initially saw its shares gain 4.5% after the results before they reversed lower. The market is therefore weighing two stories at once: Block is growing its payments businesses, but its bitcoin economics and treasury exposure still make the crypto strategy a margin and earnings variable.
