Bitcoin
Cash App’s parent company will invest 10% of Bitcoin product profits into Bitcoin purchases
Top line
Cash App Parent Block announced Thursday in your 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 in the cryptocurrency.
Less than 3% of the Block’s resources go to bitcoin-related projects. (Photo by Jakub… [+] Porzycki/NurPhoto via Getty Images)
NurPhoto via Getty Images
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, representing 0.7% of expenses related, according to its earnings report.
Block’s bitcoin gross profit totaled $80 million in the first quarter, a 59% year-over-year increase that the company attributed to the appreciation of its bitcoin inventory and a rise in the price of bitcoin during the quarter.
Former Twitter owner and Block boss Jack Dorsey said in a statement that less than 3% of the company’s resources go to bitcoin-related projects, adding that he believes the cryptocurrency “will become the native currency of the Internet.”
Block reported nearly $6 billion in revenue in the first quarter, exceeding expectations and also recording $2.1 billion in gross profit – a 22% increase from the previous year.
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great number
US$573 million. This is how much money Block invested in bitcoin at the end of the first quarter.
Tangent
Block shares jumped more than 7% in trading on Thursday after closing at $70.30 per share.
Forbes Rating
We estimate Dorsey’s net worth at US$4.4 billion– a value made up mainly of the gains he obtained from the co-founding of Twitter and Block, the latter formerly known as Square.
Main fund
Block is one of the few publicly traded companies to invest in bitcoin. Business intelligence software platform MicroStrategy purchased 9,245 bitcoins for $623 million in March, meaning the company owned about 1% of all bitcoin. The March purchase was financed primarily through the sale of convertible notes – a hybrid of stocks and bonds. Block began offering Bitcoin products in 2018 and has since reported that more than 21 million Cash App users use Bitcoin.
Further reading
Block shares jump with better-than-expected results in the first quarter (CNBC)
Jack Dorsey’s block has been criticized for not stopping criminals from abusing the Cash app (Forbes)