Block's Bitcoin business gross profit fell 50% to $52 million in the third quarter.

Block reported that third-quarter gross profit from its bitcoin ecosystem business fell 50% year-over-year to $52 million, even as segment revenue reached about $1.8 billion, according to its shareholder letter filed with the SEC. The company attributed the decline primarily to a deliberate reduction in fees on some bitcoin transactions within Cash App. That drag was offset at the group level, where total gross profit rose 22% year-over-year to $3.24 billion, led by Cash App at $2.07 billion (+27%) and Square at $1.16 billion (+14%). The results matter because they show Block trading bitcoin-related margin for volume and engagement while its core payments and banking franchises keep expanding. What to watch next is whether the fee cuts revive bitcoin transaction activity and whether Cash App and Square can sustain their double-digit gross profit growth.