- Block, a financial technology conglomerate owned by X co-founder Jack Dorsey, has announced plans to invest 10% of all profits made from bitcoin-related products in monthly BTC purchases.
- The decision was outlined in a Q1 2024 earnings report, where Dorsey addressed investors’ concerns about Block’s focus on the largest cryptocurrency.
- Dorsey believes that bitcoin is the best candidate for a decentralized open protocol for money, which he sees as a necessity for the world.
Block, owned by Jack Dorsey, plans to invest 10% of bitcoin-related profits in BTC purchases, aiming to make BTC more usable for everyday transactions and become the native currency of the internet.
Block’s Bitcoin Investment Strategy
Dorsey explained that bitcoin is the only viable candidate for a decentralized open protocol for money. He believes that BTC will eventually become the native currency of the internet, serving users worldwide without the need for hundreds of payment schemes and intermediaries. Block aims to make BTC more usable for everyday transactions, addressing the problem Satoshi Nakamoto, the pseudonymous creator of bitcoin, outlined in the project’s white paper: the lack of an electronic payment system based on cryptographic proof instead of trust.
Bitcoin as the Internet’s Native Currency
Dorsey envisions a future where the internet, including artificial intelligence systems, has a native currency, and he believes Bitcoin is the most efficient protocol for this. “Our investment in bitcoin transcends technology; it is an investment in a future where economic empowerment is the norm. This commitment drives our business into new territories, unlocking novel opportunities for our customers, and securing enduring value for our shareholders,” Dorsey said.
Block’s Q1 Revenue Surpasses Expectations
Alongside its monthly BTC purchases, Block is developing Bitcoin mining hardware, including a mining rig system and a three-nanometer ASIC mining chip. Block has already allocated $220 million into BTC, and by the end of Q1 2024, this investment had grown by approximately 160% to $537 million. Block’s Q1 2024 revenue of $5.96 billion exceeded Wall Street analysts’ estimate of $5.75 billion by 3.54%. The firm’s gross profit grew 22% year-over-year (YOY) to $2.09 billion, and its mobile payments and crypto platform Cash App reported a 25% YOY increase in gross profits to $1.26 billion.
Conclusion
Block’s decision to invest a portion of its profits in Bitcoin demonstrates its belief in the cryptocurrency’s potential as the internet’s native currency. With its Q1 revenue surpassing expectations and its Bitcoin investment strategy in place, Block is positioning itself as a major player in the cryptocurrency space.
