Twitter founder Jack Dorsey’s payments company Block has announced plans to reinvest 10% of profits from its products back into Bitcoin each month.
The initiative, unveiled in Block’s latest quarterly report, is the enigmatic billionaire’s latest move to underscore his confidence in the cryptocurrency.
The fintech company first used Bitcoin in 2020 with a $220 million investment. These holdings have since increased by 160%, reaching $573 million by the end of the first quarter of 2024. CEO Jack Dorsey emphasized his belief in Bitcoin’s potential in the report, stating: “Going forward, we will invest 10% of our gross profits each month to convert Bitcoin products into Bitcoin purchases.”
He added: “Historically and going forward, our investment in Bitcoin goes beyond technology; It is an investment in a future where economic empowerment is the norm.”
Answering the question “Why Bitcoin?” In the report, Dorsey wrote: “But why spend time on Bitcoin at all?” We believe the world needs an open protocol for money, one that is not owned or controlled by any single company becomes. We believe that Bitcoin is the best and only candidate to become that protocol and ultimately become the native currency of the Internet. ”
Block performs a DCA transfer of Bitcoin every month. Here’s how your business can do it: https://t.co/xabpCVZdn8
– Jack (@jack) May 2, 2024
Block currently dedicates less than 3% of its resources to Bitcoin projects. The company posted solid results in the first quarter, with gross profit increasing 22% year-over-year to $2.09 billion. Net income jumped to $472 million, or 74 cents per share, eclipsing the $98.3 million, or 16 cents per share, from a year earlier.
In tandem with the profit increase, Block raised its second-quarter adjusted EBITDA forecast to $690 million and raised its full-year adjusted core profit forecast to at least $2.76 billion. Investors cheered the strong performance and optimistic outlook, sending Block shares up 5% to close at $70.30.
What’s next for Jack Dorsey’s Block?
Much of Block’s success can be attributed to its Cash App unit, which generated gross profit of $1.26 billion in the first quarter, up 25% year over year. However, the mobile payment platform is facing increasing regulatory scrutiny. Federal prosecutors are investigating alleged compliance violations at Cash App and working with whistleblowers to investigate the company’s compliance practices, NBC News reported Wednesday (May).
Nevertheless, Block is pushing ahead with its Bitcoin mining ambitions. The company completed the design of a state-of-the-art 3-nanometer mining chip and collaborated with a major semiconductor manufacturer to produce it. This development marks Block’s evolution from designing individual chips to developing comprehensive mining systems.
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