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Twitter founder Jack Dorsey’s payments firm Block has announced plans to plow 10% of profits from its products back into Bitcoin each month.
The initiative, unveiled in Block’s latest quarterly report, is the latest move from the enigmatic billionaire to underline his faith in the cryptocurrency.
The fintech firm first embraced Bitcoin in 2020 with a $220 million investment. Those holdings have since surged 160% to reach $573 million by the close of Q1 2024. CEO Jack Dorsey emphasized his belief in Bitcoin’s potential in the report and stated, “Going forward, each month we will be investing 10% of our gross profit from Bitcoin products into Bitcoin purchases.”
He added, “Historically and moving forward, our investment in Bitcoin transcends technology; it is an investment in a future where economic empowerment is the norm.”
Addressing the question of ‘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’s not owned or controlled by any single entity. We believe Bitcoin is the best and only candidate to be that protocol, and to ultimately become the native currency of the internet. ”
block is DCA'ing bitcoin every month. here's how your company can do it too: https://t.co/xabpCVZdn8
— jack (@jack) May 2, 2024
Block currently dedicates less than 3% of resources to Bitcoin projects. The company posted robust Q1 results, with gross profit jumping 22% year-over-year to $2.09 billion. Net income skyrocketed to $472 million, or 74 cents per share, dwarfing the $98.3 million, or 16 cents per share, from a year earlier.
Alongside the earnings beat, Block raised its Q2 adjusted EBITDA forecast to $690 million and boosted its full-year adjusted core earnings guidance to at least $2.76 billion. Investors cheered the strong performance and bullish outlook, sending Block’s stock up 5% to close at $70.30.
What is next for Jack Dorsey’s Block
Much of Block’s success stems from its Cash App unit, which generated $1.26 billion in Q1 gross profit, up 25% year-over-year. However, the mobile payment platform faces mounting regulatory scrutiny. Federal prosecutors are probing alleged compliance lapses at Cash App and working with whistleblowers to investigate the company’s compliance practices, reported NBC News on Wednesday (May).
In spite of this, Block is advancing its Bitcoin mining ambitions. The firm completed the design of a cutting-edge 3 nanometer mining chip and partnered with a major semiconductor foundry to manufacture it. This development marks Block’s evolution from designing individual chips to engineering comprehensive mining systems.
Featured image: Ideogram
