Along with this, the company will reduce non-mining business units

Jack Dorsey’s Block will increase investment in mining and crypto wallet development

08.11.2024 - 10:15

78

4 min

What’s new? Payment company Block (formerly Square) of Twitter founder Jack Dorsey will increase investments in bitcoin mining and the development of its own non-custodial crypto wallet Bitkey from 2025. In a Q3 letter to shareholders, company officials said mining the first cryptocurrency has a “strong product market fit” and a “healthy pipeline of demand.”

Letter to shareholders

What else is known? At the same time, Block will cut its investment in the music streaming app Tidal and wind down its TBD business unit to develop a decentralized web platform called Web5. The company began laying off employees at Tidal and TBD last week, with the previous 10% staff reduction taking place in December last year.

The company clarified that Tidal will make cuts in the business and design departments and focus on serving artists in the most efficient way possible. As for TBD, the company will wind down its brand and business investments, but will remain “committed to the open source community.”

Block reported Q3 revenue of $5,98 billion, below analysts’ prediction of $6,24 billion. Against this backdrop, the company’s shares fell 10% to $66 at one point. By now, the value has recovered to $75,27.

Securities under the ticker SQ are traded on the New York Stock Exchange (NYSE). Their value has risen 14,64% for the month but has declined 0,3% since the beginning of the year.

The new letter to shareholders was published following Donald Trump’s victory in the US presidential election, who previously announced the need to make the country a global leader in mining. During his election campaign, he held a meeting with representatives of industry companies and promised to support them, which caused a sharp rise in the value of their shares.

According to the politician, supporting mining would help develop the country’s energy industry. He also claimed that all remaining bitcoins should be mined in the United States. After that, Marathon Digital, the largest miner, started labeling blocks mined in the US accordingly.

CoinShares: US authorities will purchase up to 5% of BTC supply if a national crypto reserve is created

CoinShares: US authorities will purchase up to 5% of BTC supply if a national crypto reserve is created

Earlier, Trump promised to include the first cryptocurrency in the country’s reserves if re-elected as president

Read more

Dorsey launched Square in 2009 as a mobile payments company. After rebranding in 2021, the company shifted its focus to decentralized technologies and cryptocurrency.

In April, Block completed the development of a 3 nm bitcoin mining chip and announced plans for a mining system for the asset that would support its decentralization.

In May, the company began dedicating 10% of gross profits from bitcoin products each month to the purchase of its first cryptocurrency. In a letter to shareholders, Dorsey said it was an “investment in a future where economic empowerment is the norm.”

At the same time, the company conducted a private placement of $1,5 billion in bonds. The funds will be used for debt repayment, strategic deals, and investments.

Also in May, it became known that the US Attorney’s Office suspected Block of years of violations of anti-money laundering rules due to the processing of transactions for legal entities from sanctions lists and terrorist organizations.

In July, Block entered into an agreement with US-based Core Scientific (CORZ) to supply its mining chips. Core Scientific is the second-largest mining company in the world, with a capitalization of $4,59 billion.

In Q2, Block’s revenue from bitcoin transactions grew 9% year-on-year to $2,61 billion.

Subscribe to Getblock Magazine and stay up to date with the latest news from the world of cryptocurrencies and the digital economy