- Block, formerly known as Square, plans to reinvest 10% of its Bitcoin product profits back into the cryptocurrency.
- The company’s Bitcoin holdings have surged 160% since its initial investment in 2020, now valued at $573 million.
- Despite potential regulatory challenges, Block continues to innovate with the development of an advanced Bitcoin mining system.
Block, led by Jack Dorsey, announces plans to reinvest 10% of Bitcoin product profits back into the cryptocurrency, reflecting its belief in Bitcoin as the future ‘native currency of the internet’.
Block’s Commitment to Bitcoin
Block, one of the first public companies to invest in Bitcoin, has announced plans to allocate 10% of profits from its Bitcoin products toward buying more of the cryptocurrency each month. The company’s Bitcoin holdings have surged 160% since its initial $220 million investment in 2020, reaching $573 million by the end of Q1 2024. CEO Jack Dorsey stated in a shareholder letter that he believes “the world needs an open protocol for money, one that’s not owned or controlled by any single entity,” and that “Bitcoin is the best and only candidate to be that protocol”.
Potential Regulatory Challenges
Despite its commitment to Bitcoin, Block faces potential regulatory hurdles. Federal prosecutors are currently investigating alleged compliance issues at Square and Cash App, Block’s mobile payment platforms. The investigation centers on Block’s potential failure to collect adequate customer information, transactions from sanctioned countries, and enabling crypto transactions for terrorist groups. A former employee has claimed that thousands of transactions went unreported, suggesting a significant challenge for Block in the coming months.
Block’s Innovations in Bitcoin Mining
Block is not just investing in Bitcoin, but also innovating in the space. The company recently ramped up its Bitcoin mining efforts, transitioning from designing individual chips to developing a complete mining system. Block has finalized the design of a cutting-edge 3 nanometer Bitcoin mining chip and is now partnering with a major semiconductor foundry to bring it to life.
Conclusion
Block’s commitment to reinvesting profits into Bitcoin and its innovations in Bitcoin mining reflect its belief in the cryptocurrency’s future. Despite potential regulatory challenges, the company continues to push forward, betting on Bitcoin as the ‘native currency of the internet’. This strategy, coupled with strong Q1 results, has driven Block’s stock price up, closing 5% higher at $70.30 on Thursday.
