XYZ · Forward model · Bitcoin Ecosystem
What has to happen in Bitcoin Ecosystem
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Bitcoin Ecosystem
Basis quarter$1.89B
Final quarter$1.62B
Implied CAGR−3%
Final revenue mix15%
Bitcoin bought by Cash App customers, booked gross. $1,894M of revenue produced $72M of gross profit in Q2 2026 - a 3.8% margin on 29% of the company's revenue. It exists in this model to keep the revenue reconciliation honest and to explain why Block's reported growth rate understates the business it actually runs.
Last four quarters
2025 Q3
$2.02B
Reported
2025 Q4
$1.98B
Reported
2026 Q1
$1.80B
Estimated
2026 Q2
$1.89B
Reported
Customer purchases of bitcoin within Cash AppBitcoin withdrawal feesProto mining hardware and Bitkey
Sequential growth
−2.0%/qtr
decaying toward 0.0%
Revenue fell 12.8% year over year on lower trading volume and a deliberately cut fee. -2% a quarter continues that, slower.
Bitcoin Ecosystem
Latest: $1.62B (2031Q2E)
| Period | Value |
|---|---|
| 2025Q1 | $2.33B |
| 2025Q2 | $2.17B |
| 2025Q3 | $2.02B |
| 2025Q4 | $1.98B |
| 2026Q1 | $1.80B |
| 2026Q2 | $1.89B |
| 2026Q3E | $1.86B |
| 2026Q4E | $1.82B |
| 2027Q1E | $1.79B |
| 2027Q2E | $1.77B |
| 2027Q3E | $1.75B |
| 2027Q4E | $1.73B |
| 2028Q1E | $1.71B |
| 2028Q2E | $1.70B |
| 2028Q3E | $1.69B |
| 2028Q4E | $1.68B |
| 2029Q1E | $1.67B |
| 2029Q2E | $1.66B |
| 2029Q3E | $1.65B |
| 2029Q4E | $1.65B |
| 2030Q1E | $1.64B |
| 2030Q2E | $1.64B |
| 2030Q3E | $1.63B |
| 2030Q4E | $1.63B |
| 2031Q1E | $1.63B |
| 2031Q2E | $1.62B |
Assumptions & reasoning
- SEASONALITY: none applied. Ratio-to-centred-four-quarter-moving-average gives 0.982 for 2025 Q3 and 1.011 for 2025 Q4, both within 2% of one and each from a single window, with no observation at all for Q1 or Q2. Bitcoin revenue is the bitcoin price times Cash App trading volume; neither has a calendar. Left ASEASONAL. Derived from the actuals in this vertical.
- The 10-K states the accounting plainly: 'The sale amounts received from our customers are recorded as revenue on a gross basis and the associated bitcoin cost as cost of revenues, as we are the principal in the bitcoin sale transaction.'
- The 10-K also sizes the distortion: 'the bitcoin ecosystem contributed 35% and 43% of the total revenue in 2025 and 2024, respectively, gross profit generated from the bitcoin ecosystem was only 4% and 5% of the total gross profit'. By Q2 2026 it was 28.6% of revenue and 2.3% of gross profit.
- This one line is why the R40 house Rule of 40 reads about 20 for a company whose gross profit grew 25% and whose Adjusted Operating Income grew 57%. Every percentage point this line shrinks lifts blended gross margin without anything real happening.
- Block's own $533.9M bitcoin investment - 9,117 bitcoins at 30 June 2026 - is a balance-sheet item, not this line. Its remeasurement runs below operating income, an $88.5M loss in Q2 2026, and is excluded from Adjusted Operating Income.