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Bitcoin is set to become the native currency of the internet, says Jack Dorsey
Block, the financial services and digital payments company co-founded by Jack Dorsey, has announced plans to purchase Bitcoin every month using 10% of its gross profit from Bitcoin products. The new investment strategy shows the company’s long-term commitment to the flagship crypto, which Dorsey has frequently endorsed as a significant innovation in finance.
“We believe the world needs an open protocol for money, one that’s not owned or controlled by any single entity,” Jack Dorsey said in a letter to shareholders on Thursday. “We believe Bitcoin is the best and only candidate to be that protocol, and to ultimately become the native currency of the internet.”
As reported, Block’s substantial $220 million investment in Bitcoin has already appreciated by approximately 160%, amounting to $573 million at the end of Q1/2024. This growth comes amid a surge in Bitcoin prices, driven by factors such as US regulatory approval of spot Bitcoin exchange-traded funds.
However, the volatility of the crypto market remains a concern. Despite the risks, Block shows a willingness to adapt as necessary.
“We would check back in on this approach and assess Bitcoin as a percentage of our overall liquidity, and would continue to remain nimble in how we move forward here,” Amrita Ahuja, Block’s Chief Financial Officer told Bloomberg.
In the first quarter, Block’s Cash App reported a profit of $80 million from Bitcoin transactions, contributing to the company’s current holdings of 8038 BTC.
The company’s financial performance has been strong, with first-quarter gross profit reaching $2.09 billion, largely fueled by the $1.26 billion generated by Cash App. Following the announcement, Block’s shares saw a 7.4% increase in late New York trading.
Block operates in various sectors including financial services, digital payments, and blockchain technology. The company, formerly known as Square, offers a range of services aimed at small and medium businesses. Currently, less than 3% of Block’s resources are dedicated to Bitcoin projects.
Apart from Cash App, the company is also involved in the Bitcoin mining business and self-custody wallet service. In late April, Block officially completed the development of its advanced three-nanometer Bitcoin mining chip and now focuses on building a full Bitcoin mining system.
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