Accounting for Bitcoin at Block – Case – Faculty & Research

Abstract

Abstract: This case explores Block Inc.’s accounting practices for Bitcoin transactions and their impact on financial reporting. Following a 10% stock price drop after missing revenue estimates in Q3 2024, Block faced scrutiny over its Bitcoin-driven revenue model. Unlike Coinbase, which reports net revenue, Block recognizes Bitcoin sales on a gross basis, creating discrepancies in financial comparisons. Moreover, the adoption of ASU 2023-08 introduced fair value accounting for Bitcoin holdings, leading to earnings volatility. This case examines whether Block’s accounting approach accurately reflects its business model and how investors should assess Bitcoin-related revenue and valuation amid cryptocurrency market fluctuations.

Keywords

Citation

Wang, Charles C.Y., Seil Kim, and Sa-Pyung Sean Shin. “Accounting for Bitcoin at Block.” Harvard Business School Case 125-072, February 2025. (Revised March 2025.)