Jack Dorsey, the founder of Twitter, announced today in the Q1 financial report of his payment giant Block that they plan to use 10% of the gross profit of their Bitcoin product each month to purchase Bitcoin in the future.
Established by Jack Dorsey, Block is the parent company of Square, a cryptocurrency financial payment service, and Cash App, a popular mobile payment application. They announced today that they will use 10% of the gross profit of their Bitcoin product each month to purchase Bitcoin, furthering their investment in Bitcoin worth hundreds of millions of dollars.
Jack Dorsey officially announced this measure in a letter to shareholders on the occasion of Block’s Q1 financial report. According to Block’s Q1 financial report, the group’s Bitcoin revenue (sales of BTC to customers) was $2.731 billion, accounting for about 45% of its total revenue of $6 billion. The gross profit of their Bitcoin product in Q1 was recorded at $80.11 million, a year-on-year increase of 59%, while the overall gross profit was nearly $2.1 billion, a year-on-year increase of 22%.
If the gross profit for the remaining quarters of this year remains at around $80 million, it is estimated that Block is expected to buy an additional $24 million worth of Bitcoin this year, calculated at the Bitcoin price of $59,660 before the deadline, which is approximately 402 BTC.
Block’s Bitcoin revenue and gross profit for Q1 2024, source: Block
Block currently holds 8,038 BTC with an unrealized profit of $260 million. They stated that they were one of the first public companies to include Bitcoin on their balance sheet, investing a total of $220 million to purchase Bitcoin. They currently hold approximately 8,038 BTC and are the seventh-largest holder of Bitcoin among US public companies.
At the end of the first quarter, the investment had grown by approximately 160% to $573 million, but based on the current Bitcoin price, the value of their Bitcoin holdings is about $480 million, with a current unrealized profit of $260 million. The stock price of Block rose more than 7.75% in after-hours trading today, reaching $75.75, compared to a closing price of approximately $70.3 per share on Thursday.
Jack Dorsey: Bitcoin will ultimately become the native currency of the internet
Furthermore, it is worth mentioning that Jack Dorsey’s entire letter to shareholders this time focused on explaining why Block is spending so much time on Bitcoin. As a firm believer in Bitcoin, he stated that Block’s optimism about Bitcoin is also reflected in their recent actions. In late April, Block announced a new program that allows merchants using Square services to transfer 1-10% of their daily sales into their Cash App accounts and convert it into Bitcoin. Last month, the company also announced the completion of the development of 3nm Bitcoin mining chips, with the future goal of providing independent Bitcoin mining chips and their own complete mining system to achieve their vision of strengthening decentralized Bitcoin mining.