Block, Inc.’s Bitcoin Strategy Yields Significant Profits

Financial services company Block, Inc., co-founded by tech mogul Jack Dorsey, is renowned for its substantial investment in Bitcoin (BTC). On October 7, 2020, the company made headlines by acquiring 4,709 Bitcoins at a cost of $50 million, or approximately $10,618 per coin. This move marked a strategic decision to hold Bitcoin as a significant asset on Block’s balance sheet.

Block, which also provides point-of-sale equipment to small businesses, expanded this strategy in February 2021 by purchasing an additional 3,318 Bitcoins for $170 million. As of June 30, 2024, Block held a total of 8,211 Bitcoins, valued at approximately $511.29 million based on current market rates. This reflects a paper profit of approximately $279.89 million against a cost basis of $231.4 million, marking an increase of over 120%.

In a recent corporate disclosure, Block stated that it holds Bitcoin for “long-term investment purposes” and to support its “Cash App” digital wallet service. This disclosure aligns with the company’s new strategic endeavor, announced in April 2024, to invest 10% of its monthly Bitcoin-related gross profit into additional Bitcoin purchases. This approach aims to reduce market disruption typically caused by large, sporadic acquisitions.

As of the latest market data, Bitcoin was trading at $62,269.11, reflecting a 2.03% decrease in the past 24 hours. Shares of Block experienced a similar downturn, closing 1.95% lower at $65.71 in Thursday’s trading session.

Benzinga, which reported these developments, notes that it aims to provide analysts’ insights and real-time alerts to aid in smarter investing decisions. The platform emphasizes that it does not constitute financial advice but serves to simplify market complexities for investors.