In its earnings call last week, Block, formerly named Square Inc., shed light on a months-long plan of buying Bitcoin with 10% of the gross profits it would generate from Bitcoin-related products and services.
In a blog post, the company revealed that it had implemented a Bitcoin dollar cost average (DCA) purchase program in April that would be implemented throughout 2024.
The program
As per the program, Block will invest 10% of the gross profits earned from Bitcoin products into purchasing the cryptocurrency.
In a corporate blueprint, the company stated that it was a ‘principled investment approach’ to acquire Bitcoin every month instead of buying it in a lump sum.
It also outlined how it would store the acquired Bitcoin, insure it, and how it will be accounted for in this year.
Jack Dorsey, the co-founder of Twitter, also founded Block. Its gross profit for the first quarter of the year stood at $2 billion, which is 22% higher than a year earlier.
As far as revenue is concerned, it reached a total of $6 billion, a year-on-year growth of about 19%.
A significant portion of the company’s first-quarter revenue was generated via sales of Bitcoin to customers, which was around $2.7 billion.
Commitment to Bitcoin
Block enables users of Cash App, a payments app, to purchase Bitcoin and also offers BitKey, the custodial wallet, along with a specialized chip for crypto miners.
The company renewed its commitment to Bitcoin last month when it launched a service that would allow companies to convert 10% of their revenues to Bitcoin automatically.
The firm leverages the Cash App and Square App in tandem and charges a 1% fee for every conversion made from daily sales into Bitcoin.
Street merchants use the business technology platform of Square to coffee shops and there are four million sellers currently using it.
More details
Last year, the total payments processed by the platform stood at $209 million. Block reported that in the first quarter, the total value of transactions processed by Square was $50 million.
This was an increase of 7% from the same period last year. After the earnings call, the company’s share price shot up by 9%, but it came down a day later.
Earlier, the company’s stock price had plummeted due to reports that its bitcoin business was under investigation of US prosecutors due to compliance lapses.
Michael Saylor, the Chairman and founder of MicroStrategy, also highlighted Block’s Bitcoin move on X. His company is the largest corporate Bitcoin holder with a total stash of $14.5 billion.
MicroStrategy currently owns a total of 214,000 BTC tokens that it acquired in a total of 30 purchases. Meanwhile, Block has only purchased Bitcoin twice.
Block had been one of the early adopters amongst Wall Street-traded firms and had bought 4,700 Bitcoin only two months after MicroStrategy’s first purchase in 2020.
In early 2021, Block had made its second purchase of 3,300 Bitcoin for which it paid a total of $220 million.
It owns a total of 8,000 BTC tokens, which makes it the seventh-largest holding among publicly traded companies.