Bitcoin Profit Slumps 31% as Block Cuts Cash App Fees Amid Volatility

Woofun AI reports that a 31% year-over-year contraction in Bitcoin gross profit defined Block’s second-quarter 2026 performance, a decline directly attributed to strategic fee reductions within the Cash App platform under Jack Dorsey’s leadership.

The digital asset segment generated $1.89 billion in revenue volume from April to June 2026, marking a 13% decrease from the $2.17 billion recorded in the same period of the prior year.

However, this figure represents a 5% sequential rebound compared to the first quarter of the current fiscal year, indicating a slight stabilization in trading activity despite the broader annual downturn.

Gross profit from this division narrowed significantly, dropping from $105 million in the second quarter of the previous year to $72 million in the current quarter. This contraction stems from a dual pressure: a deliberate strategic decision to reduce fees for users conducting Bitcoin transactions via Cash App, and a broader slowdown in global cryptocurrency trading volume throughout 2026.

Woofun AI data shows Cash App remained the primary revenue driver, contributing $1.81 billion of the total Bitcoin revenue reported during the period. The quarterly balance sheet also reflected the volatility of the company’s reserves, with Block recording an $88.5 million unrealized loss on its treasury assets at quarter-end, a stark contrast to the $212.2 million unrealized gain achieved in the second quarter of the previous year.

As of May 8, 2026, the company held 9,032 BTC in its corporate treasury, an increase of 35 BTC from the 8,997 BTC reported at the end of the first quarter. This holding exceeded a consolidated value of $586 million based on recent price quotes. Consequently, these accounting adjustments caused Block’s consolidated net income to fall to $89 million in the second quarter of 2026, down sharply from the $538 million recorded a year earlier.

Despite the crypto division’s struggles, overall corporate performance remained robust, with total gross profit climbing 25% year-over-year to $3.17 billion. Cash App’s gross profit increased by 31% to $1.97 billion, while Square recorded a 13% rise, contributing $1.16 billion. Management revised its full-year 2026 gross profit guidance upward to $12.51 billion, implying 21% annual growth, and finalized the integration of the USDC stablecoin issued by Circle into Cash App.

Market reaction was mixed, with shares reversing an initial 4.5% gain to trade more than 2% lower near $84.20 in after-hours trading. The next critical milestone will be the formal filing of audited third-quarter 2026 financial statements with the United States Securities and Exchange Commission (SEC), where investors will scrutinize whether the fee-cut strategy has stabilized user acquisition costs.