Block's Bitcoin Bet: $24M More by 2024, Unveils Crypto Guide

Key Takeaway

• Block (SQ) is expanding its bitcoin holdings, dedicating 10% of monthly bitcoin-related gross profit to buy more BTC through 2024.
• With $80 million in Q1 bitcoin gross profit, Block's new strategy could add $24 million in BTC to its balance sheet annually.
• The company also published a Bitcoin Blueprint for Corporate Balance Sheets, detailing acquisition and management of large crypto assets.

Block's Bold Bitcoin Strategy

Payments giant Block Inc., led by CEO Jack Dorsey, has embarked on an aggressive Bitcoin investment strategy, allocating 10% of its monthly bitcoin-related gross profit towards purchasing more of the cryptocurrency. This initiative, set to run through the end of 2024, could see Block adding another $24 million worth of Bitcoin to its already substantial holdings, given its $80 million Bitcoin gross profit in the first quarter. This move is part of a broader vision shared by Dorsey, who sees Bitcoin as the future native currency of the internet, emphasizing the importance of an open money protocol not controlled by any entity. Block's commitment is further highlighted by its significant initial investment in Bitcoin, which has grown by about 160% to $573 million, showcasing the company's strong belief in the cryptocurrency's potential.

Financial Growth Amidst Challenges

Despite facing a challenging year with its shares down 9%, Block has reported a stellar financial performance in the first quarter, exceeding analysts' expectations. The company announced adjusted earnings per share of 85 cents, beating the forecasted 72 cents, with revenue reaching $5.97 billion against the expected $5.82 billion. This financial success is marked by a 22% year-over-year increase in gross profit, totaling $2.09 billion, and a net income of $472 million, significantly higher than the same period a year earlier. Block's robust financial health and operational efficiency are evident, even as it navigates challenges such as a federal probe into its compliance practices and the performance of its flagship mobile payment platform, Cash App.

Bitcoin Investment and Corporate Strategy

Block's strategy to invest a portion of its Bitcoin profits back into the cryptocurrency is a testament to its commitment to fostering the growth of Bitcoin. The company has not only invested heavily in Bitcoin but has also shared its Bitcoin Blueprint For Corporate Balance Sheets, detailing the acquisition, custody, insurance, and accounting of its Bitcoin holdings. This approach not only reinforces Block's belief in Bitcoin's future but also demonstrates a sophisticated understanding of how to manage and grow its cryptocurrency investments responsibly.

Management Quotes

• Jack Dorsey, CEO of Block:

  "Led by CEO Jack Dorsey, the company in April began using 10% of its monthly bitcoin-related gross profit to buy additional bitcoin, with plans to do this each month for the remainder of 2024."