Block, the company headed by Jack Dorsey, is embarking on a bold strategy for its future. The company plans to invest 10% of its annual profits in Bitcoin, which could represent an investment of almost $900 million by 2024. However, this move comes as Block is under investigation by the US Department of Justice (DOJ), regarding transactions originating from countries subject to international sanctions.
Block could invest nearly $900 million in Bitcoin
A few months ago, Twitter co-founder Jack Dorsey stepped down as CEO of the social network to focus on his other company Block, previously known as Square. Block brings together several entities, including Square, a company specializing in point-of-sale hardware and software, and Cash App, a mobile payment service.
Jack Dorsey has always been a fervent supporter of Bitcoin, as evidenced by his participation in numerous conferences and his frequent interventions in the mainstream media on the subject.
Block recently announced that in the future, the company will invest 10% of its profits in Bitcoin.
block is DCA’ing bitcoin every month. here’s how your company can do it too: https://t.co/xabpCVZdn8
– jack (@jack) May 2, 2024
The company’s recent results reveal a significant increase in profits, reaching $2.09 billion in Q1 2024, up 21% year-on-year.
Amrita Ahuja, Block’s CFO and COO, notably announced that the company’s goal is to reach “Rule 40” by 2026. This rule is a long-term growth and profitability strategy that aims to balance expansion and financial profitability.
For the year 2024, Block has revised its forecasts upwards, now anticipating $8.78 billion in gross profits, compared with $7.58 billion achieved in 2023.
So, if Jack Dorsey’s company invests 10% of its profits in Bitcoin every month, this would represent an investment of $878 million by the end of the year. At the current price, this is equivalent to over 14,000 BTC.
Block’s activities are monitored by the authorities
Investing a significant portion of your capital in Bitcoin involves risks, not least because of BTC’s volatility. Although its price has risen by over 110% in the past year, its volatility could result in significant losses.
In addition, Block recently became the target of an investigation by the U.S. Department of Justice (DOJ). This investigation was launched after the discovery, via internal documents, that Block had allegedly processed cryptocurrency transactions from countries subject to international financial sanctions, such as Cuba, Iran, Russia, and Venezuela. According to testimonies from former employees, the majority of these transactions were not reported to the relevant authorities.
This event echoes the recent arrest of the founders of Samouraï Wallet, a non-custodial Bitcoin wallet featuring a fund-mixing function designed to enhance the confidentiality of its users.
Investing a portion of one’s funds could be ill-perceived by the US authorities, who seem to have launched an offensive against non-custodial services on their territory.
