Fintech firm Block, Inc. will allocate 10% of its gross profit from its Bitcoin products to buy Bitcoin on a monthly basis.
“Going forward, we intend to invest 10% of our gross profits from bitcoin products into bitcoin each month,” Jack Dorsey, the co-founder of Twitter, wrote in his shareholder letter on May 2 that accompanied better-than-expected first-quarter results.
He added, “We were one of the first public companies to put bitcoin on our balance sheet,” with Block buying $220 million worth of BTC in the fourth quarter of 2020 and the first quarter of 2021.
Block’s latest earnings detailed that it held 8,038 BTC as of March 31 – worth $573 million at the time with an unrealized gain of $233 million reported.
Block’s bitcoin gross profit rose by nearly 60% year-over-year to $80.1 million in the first quarter of 2024, on the back of sales to customers through its Cash App business. If the plan goes through, it could see it buy roughly 1,350 BTC at the current price of $59,250.
Coinbase saw its bitcoin revenue jump 26% year-over-year to $2.73 billion during the first quarter, helped by the rising market price of bitcoin during the quarter. The firm’s CEO, Dorsey, has emphasized his commitment to bitcoin and the firm’s belief in the need for an open, native protocol for money.
Despite only allocating around 3% of its resources to bitcoin-related projects, it has launched its own bitcoin wallet, dubbed Bitkey, and is developing a full Bitcoin mining system in order to mitigate challenges from the upcoming 50% block reward reduction.
Dorsey believes that, in the future, the internet will have a native currency, but that this will take time to develop and that legacy and emergent financial systems will co-exist for some time.
