The news was just making the rounds that US authorities were investigating illegal transactions at Block. Because of inadequate controls, the company founded by Jack Dorsey enabled terrorist financing and sanctions evasion. But the man who was once the face of Twitter isn’t going to be defeated so easily. Block has now presented figures for the first quarter and significantly exceeded analysts’ expectations. But that wasn’t all: Dorsey, an enthusiastic Bitcoin supporter, also announced Block’s new investment strategy. The core of his ambitious plan: Buy more Bitcoin – with a monthly BTC savings plan.
Block’s earnings per share came in at $0.85, above the analyst firm’s estimate Zacks of $0.62 per share. In addition, gross profit in the first quarter reached $2.09 billion, an increase of 22 percent compared to the same quarter last year. However, Dorsey opened the letter to Block shareholders with an answer to the provocative question: “Why the hell are you spending so much time on Bitcoin?” He admitted that currently less than 3 percent of Block’s resources are going to Bitcoin-related projects. But: These BTC projects are very important because “the world needs an open protocol for money.”
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What particularly made Bitcoiners sit up and take notice were the BTC purchases announced by Dorsey. Apparently, Block began using ten percent of its monthly gross profit from its in-house Bitcoin division to purchase additional BTC back in April. This savings plan strategy will now be used for at least the rest of 2014. In the first quarter, Block had generated BTC-related gross profit of $80 million. According to a projection, the company could buy around $24 million worth of BTC by the end of the year. At the current rate that would be around 389 Bitcoin.
However, Block already has large BTC reserves that the payment service provider acquired during the last Bitcoin cycle. In October 2020, Block purchased a significant 4709 Bitcoin and in early 2021 another 3318 Bitcoin. Given the current BTC price of around $61,600, these holdings are worth around $494 million. This makes Block one of them ten companies with the largest Bitcoin assets in the world. From now on, CEO Jack Dorsey is once again pushing Bitcoin adoption forward in two ways: both through BTC business with customers of the block platforms Square and Cash.App, and through new BTC purchases. An exciting plan.
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