Cash App parent company Block has announced a new strategy in its first quarter earnings report. They plan to invest 10% of their gross profit from bitcoin products into bitcoin purchases, building on their existing multi-hundred-million dollar investment in the cryptocurrency. The decision comes after the products generated a significant portion of Block’s gross profit in recent years.
In the first quarter, Block’s bitcoin gross profit increased by 59% year-over-year, reaching $80 million. This growth was attributed to a price appreciation of its bitcoin inventory and an increase in the price of bitcoin during the quarter. Despite this success, less than 3% of the company’s resources are currently allocated to bitcoin-related projects, according to Block’s chief Jack Dorsey, who believes that bitcoin will become the native currency of the internet.
Block reported nearly $6 billion in revenue for the first quarter, exceeding expectations, and posted $2.1 billion in gross profit, up 22% from the previous year. The company’s stock jumped more than 7% in after-hours trading following the earnings report. As of the end of the first quarter, Block has invested $573 million in bitcoin, further solidifying their commitment to the cryptocurrency.
Block is among the few publicly traded companies investing in bitcoin. MicroStrategy, a business intelligence software platform, recently purchased a significant amount of bitcoin for $623 million, making up about 1% of all bitcoin. Block began offering bitcoin products in 2018 and has since reported over 21 million Cash App users utilizing bitcoin. The company’s success in the cryptocurrency market has contributed to their overall financial performance.
Jack Dorsey’s net worth is estimated at $4.4 billion, primarily due to his founding of Twitter and Block. Dorsey’s belief in the potential of bitcoin as the native currency of the internet has been a driving force behind Block’s investment and growth in the cryptocurrency market. With the company’s strong performance in the first quarter and ongoing commitment to bitcoin, Block continues to position itself as a major player in the fintech industry.
Overall, Block’s decision to allocate 10% of their gross profit from bitcoin products into further bitcoin purchases marks a significant development in their investment strategy. With a strong first quarter performance and ongoing growth in the cryptocurrency market, Block solidifies its position as a key player in the fintech industry and reinforces their commitment to bitcoin as a key component of their business strategy.
