Cash App parent company Block announced Thursday in its first quarter earnings report it will begin putting 10% of its gross profit from bitcoin products into bitcoin purchases, furthering the fintech conglomerate’s multi-hundred-million dollar investment into the cryptocurrency.
KEY FACTS
Block’s decision to invest 10% of its gross profit from Cash App’s bitcoin products comes after the products generated 3.3% and 4.2% of Block’s gross profit in 2022 and 2023, accounting for 0.7% of related expenses, according to its earnings report.
Block’s bitcoin gross profit totaled $80 million in the first quarter, a 59% increase year-over-year that the company attributed to a price appreciation of its bitcoin inventory and an increase in the price of bitcoin during the quarter.
Ex-Twitter owner and Block chief Jack Dorsey said in a statement less than 3% of the company’s resources go toward bitcoin-related projects, adding he believes the cryptocurrency will “become the native currency of the internet.”
Block reported nearly $6 billion in revenue for the first quarter, beating expectations and also posting $2.1 billion in gross profit—up 22% from a year ago.
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BIG NUMBER
$573 million. That’s how much money Block has invested in bitcoin as of the end of the first quarter.
TANGENT
Block’s stock jumped more than 7% in after-hours trading Thursday after closing at $70.30 per share.
FORBES VALUATION
We estimate Dorsey’s net worth at $4.4 billion—a figure primarily made up of gains he made from co-founding Twitter and Block, the latter of which was formerly known as Square.
KEY BACKGROUND
Block is one of a few publicly traded companies to invest in bitcoin. Business intelligence software platform MicroStrategy purchased 9,245 bitcoin for $623 million in March, meaning the company owned about 1% of all bitcoin. The March purchase was primarily financed through the sale of convertible notes—a hybrid of stocks and bonds. Block began offering bitcoin products in 2018 and, ever since, has reported more than 21 million Cash App users use bitcoin.
FURTHER READING
Block shares jump on better-than-expected first-quarter results (CNBC)
Jack Dorsey’s Block Slammed For Failure To Stop Criminals Abusing Cash App (Forbes)
