Jack Dorsey’s Block Boosts Bitcoin Mining Plans Amid Trump Win

Block Inc., formerly known as Square, led by Jack Dorsey is redirecting its strategy to Bitcoin mining and self-custody wallets as it reduces its funding on the decentralized web projects and the music streaming app, Tidal. This strategic shift was made shortly after Trump’s win in the recent U.S. presidential election, which has positive sentiment in the cryptocurrency industry. 

Trump supported the digital asset industry during his presidential campaign, and the struggling Bitcoin mining sector, which has been unprofitable since the halving in the first half of this year.

Block Prioritizes Bitcoin Mining and Wallet Development

According to Block’s third-quarter shareholder letter, the company decided to shift resources from Web5 and Tidal toBTC products. Block, which has been constructing mining equipment instead of mining the Bitcoin, plans to increase its impact within the industry through the manufacturing of mining equipment. This comes after Bitcoin Maxi Michael Saylor invited Microsoft CEO Satya Nadella to consider adding Bitcoin to the company’s investment portfolio.

The company disclosed that it had found a 3-nanometer mining chip in April 2024, which proved that the company is working towards enhancing mining technology for business use. In July this year, Core Scientific, one of the largest Bitcoin mining companies, said it would employ Block’s miners for its operations, suggesting high interest in Block’s products.

Furthermore, Block has also announced the intention to increase investment in Bitkey, a recently launched self-custody Bitcoin wallet introduced in March. Bitkey enables users to buy, sell, and hold Bitcoin with the ability to connect to Block’s Cash App and Coinbase platform. The emphasis on Bitkey is in line with Block’s vision of offering safer storage and transaction solutions for cryptocurrencies.

Decision to Wind Down Web5 and Tidal Investments

Block’s decision to shut down the Web5 project marks the end of an ambitious attempt to develop a decentralized internet framework. Web5, introduced in 2022, aimed to create technologies that support decentralized identity, personal data storage, and verifiable data exchange. 

However, with limited progress and mounting competition in the blockchain-based internet space, Block has chosen to discontinue the project and allocate its resources to areas with stronger demand and clearer revenue prospects.

The company is also scaling back its investment in Tidal, the music streaming platform it acquired in 2021 for nearly $300 million. Tidal has undergone staff reductions in recent years, and Block’s leadership acknowledged that the platform had not met expectations for user growth and revenue. By reallocating funds from Tidal, Block aims to strengthen its financial position and channel resources toward its cryptocurrency initiatives.

Financial Performance and Market Reaction

Block’s third-quarter financial report revealed revenue of $5.98 billion, below analysts’ expectations of $6.24 billion, according to FactSet. This miss, coupled with the restructuring announcement, led to an initial 10% drop in Block’s share price in after-hours trading.

Although the stock recovered some losses, Block remains under pressure to demonstrate growth, especially as it faces competition from payment companies like PayPal and Stripe.

Revenue from Bitcoin and Cash App also fell short of projections, reporting $2.43 billion and $3.93 billion, respectively. Block attributed some of these results to a challenging market environment for digital assets. Despite these challenges, the company reported a 6% year-over-year revenue increase, reflecting steady growth in its core business.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.