Explore Block to invest 10% of profit into Bitcoin monthly in the crypto market
On Thursday, Block raised its adjusted core earnings estimate for the entire year and announced plans to increase its bitcoin holdings as the company continues to invest heavily in the digital currency, led by Jack Dorsey. The company’s stock rose 7.9% in trading after the bell.
Bitcoin, once a niche asset class, has become more mainstream after the SEC cleared several bitcoin ETFs in January. Chief Executive Officer Dorsey said in the shareholder letter that Block to Invest 10% of Profits into Bitcoin; Block will use 10% of each month’s gross profit generated from Bitcoin products to purchase assets in this asset class.
Dorsey wrote in the note, “We believe the world needs an open protocol for money, one that’s not owned or controlled by any single entity.” He also stated that the company currently allocates less than three percent of its budget to Bitcoin-related initiatives.
Block now expects adjusted core earnings for 2022 and beyond to be at least US$2,76 billion, up from its previous estimate of US$2,63 billion.
Payment companies have capitalized on tight labor markets and rising wages, enabling Americans to ignore economic concerns and continue to spend more on leisure, shopping, and eating out.
Block’s estimate-topping performance caps a solid fourth quarter for the payments industry, which is heavily reliant on robust consumer spending. In the most recent quarter, the company’s total net revenue increased by 19% to reach US$5.96 billion.
Another sign that consumer spending remains resilient is the fact that PayPal, its larger rival, also raised its profit estimate for the entire year on Thursday.
Adjusted earnings per share (EPS) for the three months ended March 31, 2022, was 85 cents per share, while analysts expected EPS of 72 cents. As of its last close, the company’s shares were down 9.1% year-to-date, trailing its peer PayPal, which gained 9%.
