Block, the payments firm led by CEO Jack Dorsey, has laucnhed a dollar cost averaging (DCA) program to expand its bitcoin holdings, leveraging 10% of its monthly bitcoin-related gross profit for additional bitcoin purchases throughout 2024.
The decision follows the company’s first-quarter financial results which revealed an $80 million bitcoin gross profit. If this profit trend continues, Block is expected to add nearly $24 million worth of bitcoin to its balance sheet by the end of the year.
In the after-hours trading session on Thursday, Block’s shares saw an uptick following the release of first-quarter earnings that exceeded analyst expectations. The company reported adjusted earnings of 85 cents per share, with revenue reaching $5.97 billion—above Wall Street’s forecast of $5.82 billion. Gross profit for the quarter increased by 22% year-over-year to $2.09 billion.
Moreover, Block publicized its plans to grow its bitcoin reserves and has made its treasury blueprint public, encouraging other companies to adopt similar strategies. This move aligns with Dorsey’s vision of bitcoin becoming the native currency of the internet. “We believe the world needs an open protocol for money, one that’s not owned or controlled by any single entity. We believe bitcoin is the best and only candidate to be that protocol,” Dorsey stated in a shareholder letter.
The company’s original bitcoin investment of $220 million has appreciated by 160% to $573 million. Block’s Cash App unit also reported a 25% growth in gross profit year-over-year for the first quarter, driven by a range of services including its BNPL platform, Bitcoin products, and Cash App Borrow.
Separately, Block completed a three-nanometer Bitcoin mining chip, advancing its goal to support decentralized mining through standalone mining chips and systems.
That said, Block is currently addressing inquiries from federal prosecutors concerning non-compliant crypto services, as part of an ongoing investigation into the company’s compliance practices.
Block previously acquired 4,709 bitcoins in October 2020 and an additional 3,318 tokens in early 2021. At the current bitcoin price of about $59,000, these holdings are valued at roughly $4.7 billion.
