Square (SQ) hasn't escaped the volatility in bitcoin this year by any means. 

The payments platform — which allows the buying and selling of bitcoin via its Cash App — said Monday its second quarter bitcoin revenue clocked in at $2.72 billion. That's a 23% drop from the first quarter. Gross profit from Square's bitcoin business tallied $55 million, down $20 million from the first quarter. Year-to-date Square has been forced to take $65 million in impairments related to its bitcoin holdings. 

The muted second quarter for Square's bitcoin business — and subsequent valuation impairments — reflects the steep pullback in the benchmark crypto from the highs this year.

From the record highs of more than $63,000 in mid-April, bitcoin has shed about 38% (including a trip below the $30,000 level in July, though it has rebounded to around $40,000). Major sell-offs have spread to other top cryptos such as dogecoin and ethereum amid fears of regulator crackdowns in the U.S. and China.

The selling pressure in crypto has also extended to stocks of companies with exposure to the space.

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Coinbase (COIN) shares are down about 20% over the past three months. At $238.14, Coinbase shares trade well below the $328.88 level set on its Nasdaq debut in mid-April. PayPal (PYPL) — another early bitcoin adopter — has seen its stock only rise 4% in the past three months vs. a 6% gain for the Nasdaq Composite. 

Square's disappointing quarter for bitcoin took a backseat today to its $29 billion acquisition of buy-now, pay-later platform AfterPay. 

The Street has mixed views on the transaction even as investors sent Square shares up 12% on the news. 

"The deal makes a lot of sense," BTIG analyst Mark Palmer said on Yahoo Finance Live.

Others took the other side of the coin, no pun intended.

"The almost USD $30 billion acquisition of a still young, but fast-growing, fin-tech player adds to the already risky investment profile of Square. AfterPay's main offering is installment payments and the business model is based on taking over non-repayment risk from merchants for relatively high fees. The firm has a solid credit risk management track record but installment lending is being scrutinized and will likely become more strictly regulated. Moreover, several large financial groups, as well as niche players, have offered similar features in recent months," said analysts at Financiële Diensten Amsterdam (FDA) in a flash note to clients. 

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Added FDA, "AfterPay's tighter integration between the merchant and consumer offerings would help to expand and strengthen Square's merchant and consumer ecosystems by amplifying network effects. This may help the firm to defend itself from the rising competition while providing additional growth opportunities, including among somewhat larger clients. Square's shares are among FDA's preferred investment choices."

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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