Block to Invest 10% of Monthly Bitcoin Profits in BTC
Jack Dorsey’s financial services company, Block Inc., has revealed plans to allocate 10% of its monthly Bitcoin-related gross profits towards purchasing BTC. This decision follows Block’s impressive first-quarter earnings for 2024, showcasing significant profits from its Bitcoin activities.
New Dollar Cost Averaging Program
Block recorded $80 million in Bitcoin-related gross profits in Q1 2024 alone. With this success, the implementation of a new dollar cost averaging (DCA) initiative could mean investing around $24 million in BTC within a year. The purpose of this program is to boost the company’s Bitcoin holdings by purchasing in a way that minimizes market impact.
- Block aims to enhance its BTC reserves through strategic monthly investments
- Dorsey shared a valuable guide, “Bitcoin Blueprint For Corporate Balance Sheets,” for companies interested in Bitcoin integration
Strategic Acquisition Approach
Formerly known as Square, Block began its significant Bitcoin acquisitions in October 2020 by purchasing 4,709 BTC for $50 million. This was followed by another 3,318 BTC acquisition in February 2021 worth $170 million. As of March 31, 2024, Block holds approximately 8,038 BTC, accounting for 9% of its total cash and marketable securities.
- Block prefers over-the-counter transactions with liquidity providers for Bitcoin purchases
- The company uses Time-Weighted Average Price (TWAP) to optimize trade execution
Belief in Bitcoin’s Empowering Potential
Block’s investment strategy reflects its belief in Bitcoin’s capacity as a tool for global economic empowerment. The company sees Bitcoin as a means for individuals worldwide to participate in a global monetary system and safeguard their financial future.
- Block executed $4.4 million in Bitcoin purchases under the DCA program in April 2024
- Block offers various Bitcoin-related products and services through its ecosystem, such as Cash App and TBD
Compliance and Security Measures
Block has embraced up-to-date accounting standards for digital assets, following the Financial Accounting Standards Board’s regulations. These standards require Bitcoin investments to be re-measured to fair value, with value fluctuations reflected in net income.
- Block emphasizes secure custody of digital assets through cold storage solutions backed by Hardware Security Modules
- Private keys essential for accessing BTC holdings are well-secured and protected from unauthorized access
Hot Take: Block’s Bold Bitcoin Investment Strategy
As part of its financial operations, Block Inc. under the leadership of Jack Dorsey has unveiled a groundbreaking investment plan to allocate 10% of its monthly Bitcoin profits to purchase BTC. This strategic move aims to bolster the company’s Bitcoin reserves while adhering to meticulous purchasing strategies to minimize market impact and ensure long-term growth. By consistently investing in Bitcoin, Block is not only securing its financial future but also demonstrating a strong belief in Bitcoin’s potential for global economic empowerment and financial inclusion.
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