Crypto firm Block among top-ranked ‘Fortune 500’ winners despite turbulent year
The cryptocurrency market meltdown of 2022 has taken a significant toll on most businesses, with a majority recording a drop in valuations and revenues while others have been forced into bankruptcy. However, some crypto entities appear to be thriving amid the turbulence as they wait for possible improved fortunes in the digital asset market.
Notably, payments platform Block.Inc (NYSE: SQ ) has emerged as one of the biggest gainers on the 2022 Fortune 500 list, ranked at position 208, with a change in rank of 115. The ranking makes Block the 14th highest gainer in Fortune 500 list.
Interestingly, Block recorded a negative earnings change of 22% during the period under review, while revenues rose by 86%.
The profit drop can be linked to a correction in the price of Bitcoin (BTC) in the first half of 2022, especially as the payment company partly profits from Bitcoin’s gross profit.
Block affected by drop in Bitcoin prices
For example, during the second quarter of 2022, the firm founded by former Twitter (NYSE: TWTR ) CEO Jack Dorsey recorded a loss of $36 million in Bitcoin. The decline was attributed to “broader uncertainty surrounding cryptoassets.”
“The year-over-year decline in Bitcoin revenue and gross profit was primarily driven by a decline in consumer demand and the price of Bitcoin, partially related to greater uncertainty surrounding cryptoassets, which more than offset the benefit of volatility in the price of Bitcoin during quarter,” the company said.
In addition to the impact of the crypto market, Block, formerly Stripe, has been hit by the effects of high inflation that led to changes in consumer behavior.
Elsewhere, the Fortune Global 500 list released Aug. 3 ranked Walmart (NYSE: WMT ) as the top U.S. company, maintaining its position for nine consecutive years. In second place is the e-commerce giant Amazon (NASDAQ: AMZN). The Fortune 500 list ranks the largest US companies by total revenue for their fiscal years.
Crypto firms file for bankruptcy
Overall, after the meltdown, crypto lending platforms Celsius and Voyager Digital filed for bankruptcy. Notably, the impact of the market correction was first signaled by Celsius, which prevented investors from making withdrawals citing liquidity challenges.
Although the companies have claimed that they are working on a solution, users on the platforms do not yet have access to their money. Despite the correction of the crypto market, the firms have also been scrutinized for mishandling their business approach.
