Block Increases Bitcoin Holdings by Investing 10% of Gross Profit Monthly
Jack Dorsey, the founder of Twitter, has long been a staunch supporter of cryptocurrencies. After leaving Twitter, he fully dedicated himself to the cryptocurrency financial payment service Square and the mobile payment app Block. In the first-quarter earnings report of Block, which was announced today, Dorsey stated that they will be “dollar-cost averaging Bitcoin (BTC)” by investing 10% of the gross profit every month.
In the shareholder letter released by Block during the announcement of its first-quarter earnings report, Jack Dorsey officially declared their plan to reinvest 10% of the gross profit from Bitcoin products into Bitcoin itself on a monthly basis.
According to the publicly available financial report of Block, in the first quarter of 2024, due to the rise in cryptocurrency market prices, the Bitcoin revenue of Block (selling Bitcoin to customers) amounted to $2.731 billion, accounting for 45% of the total revenue, with a Bitcoin gross profit of $80 million.
If this performance continues until the end of this year, and if Block truly implements this plan, the company is expected to purchase an additional $24 million worth of Bitcoin. As of the time of writing this article, the price of Bitcoin is $59,709, which means that approximately 401 Bitcoins can be purchased.
“The world needs Bitcoin!” Block actively expands its presence in the Bitcoin field.
Block has invested a total of $220 million in Bitcoin in the fourth quarter of 2020 and the first quarter of 2021. In the shareholder letter, Jack Dorsey also pointed out that “we are one of the first public companies to include Bitcoin on our balance sheet.”
As of March 31st, Block holds a total of 8,038 Bitcoins, valued at $573 million, making it the seventh-largest Bitcoin holder among publicly listed companies in the United States.
Further reading: Bitcoin revenue accounts for more than half! Block achieves $5.5 billion in revenue with two major engines, why is the business still thriving during bear markets?
In the shareholder letter, Jack Dorsey mentioned that Block has spent a lot of time on Bitcoin because he believes that the world needs an open currency protocol that is not owned or controlled by any single entity, and Bitcoin is the best, if not the only, option.
Therefore, Block is actively expanding its presence in the Bitcoin field. For example, they launched the Bitcoin wallet Bitkey in December last year and recently announced the completion of the development of three-nanometer chips for Bitcoin mining, in collaboration with a leading global semiconductor foundry. Their goal is to provide independent Bitcoin mining chips and their own complete mining system to help alleviate the survival challenges faced by miners after the Bitcoin halving.
In addition, Block has also made its Bitcoin financial blueprint public to facilitate other companies to follow suit. The document explains how the team acquires a large amount of cryptocurrency without overly affecting the market, as well as how to custody, secure, and account for Bitcoin assets on the balance sheet. Despite currently allocating less than 3% of the company’s resources to Bitcoin-related projects, Jack Dorsey believes that Bitcoin, as an open currency protocol, will help Block serve global users faster.
References: cointelegraph, The Block, coindesk