Jack Dorsey-led Block, a company that added Bitcoin to its holdings in 2020, 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 to $573 million by the end of Q1 in 2024. Dorsey stated that Bitcoin is the best candidate to be the native currency of the internet, as it is not owned or controlled by any single entity. Currently, Block allocates less than 3% of its resources to Bitcoin projects.
In the first quarter, Block’s gross profit grew 22% year-over-year to $2.09 billion, with net income quadrupling to $472 million, or 74 cents per share. The company raised its adjusted EBITDA forecast for the second quarter to $690 million and its annual adjusted core earnings guidance to at least $2.76 billion. These strong results and optimistic outlook led to a 5% increase in the stock price, closing at $70.30 on Thursday. The company’s mobile payment platform, Cash App, continued to be a profit powerhouse, generating $1.26 billion in gross profit, a 25% increase year-over-year.
However, Block faces potential regulatory issues as federal prosecutors are investigating alleged compliance issues at Square and Cash App. Concerns center on the company potentially failing 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, presenting a significant challenge for Block in the coming months. Despite these challenges, the company remains focused on its growth and innovation.
Block recently unveiled an advanced Bitcoin mining system, transitioning from designing individual chips to developing a complete mining system. The company 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. This move signals Block’s continued commitment to expanding its Bitcoin-related operations and staying at the forefront of the cryptocurrency industry. The company’s innovative approach to Bitcoin mining is expected to further solidify its position in the market and drive future growth.
Overall, Block’s quarterly report highlights its strong financial performance, growth in Bitcoin holdings, and commitment to innovation. Despite facing potential regulatory challenges, the company remains optimistic about its outlook and continues to invest in its Bitcoin-related initiatives. With an ambitious vision for the future of money and technology, Block is poised to remain a key player in the cryptocurrency and fintech sectors. Investors and stakeholders can look forward to further developments and advancements from the company as it navigates the evolving regulatory landscape and drives continued growth and success in the market.
