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In summary
- Block, Inc. increased its focus on developing Bitcoin Mining hardware, hoping that Trump’s victory will benefit the sector.
- The company will reduce its investments in TIDAL and end its Web5 initiative to focus on Proto, its Bitcoin mining project.
- Block achieved good results in the third quarter of 2024, with an increase in revenue and profitability, highlighting its progress in mining hardware.
Block, Inc. is doubling down on its investment in the Bitcoin mining hardware business as it hopes Donald Trump’s presidential victory will usher the crypto industry into a potentially more favorable environment for the Cryptocurrency mining sector.
The Blockchain infrastructure and payments company led by Jack Dorsey announced in a letter to shareholders published on Thursday that it would reallocate resources to focus on the development of mining equipment.
Trump’s campaign promises to support bitcoin mining in the US come at a critical time for the sector, which has faced profitability challenges following the recent halving event, which cut mining rewards in half to 3,125 BTC .
This comes as Block prepares to reduce its investments in TIDAL, a music streaming platform it acquired in 2021 for approximately $300 million. Importantly, the company is also ending TBD, its “Web5” decentralized internet initiative, according to the letter.
The company says such a move would give it room to redirect its resources to Proto, its Bitcoin mining initiative, which it claims “has strong product-market fit and healthy demand in the pipeline.”
It is unclear if Block’s Proto team is responsible for the development of the mining chips or if it is also working on the development of Block’s modular mining and software platforms. Decrypt has reached out to Block for clarification.
Financial rigor
Block’s strategic shift follows a previous announcement in January that it would cut 10% of its workforce by the end of the year, citing company growth outpacing business and revenue expansion.
Block posted strong third-quarter 2024 results on Thursday, with gross profit up 19% to $2.25 billion year-over-year, led by contributions of $1.31 billion from Cash App and $932 million from Square.
The company also showed improved profitability, with operating income of $323 million on net income of $284 million. Core earnings grew 69% to $807 million compared to the prior year.
The company’s mining initiatives include the development of proprietary hardware, highlighted by the completion of a 3-nanometer mining chip to compete with Bitmain’s BM1600 chip.
For context, Bitmain is a dominant player in the Bitcoin mining industry, operating major mining pools like Antpool, which accounts for a fifth (21.3%) of the Bitcoin network’s hash rate.
Core Scientific, a major player in Bitcoin mining in the US, has agreed to use Block’s mining equipment for its operations, which has been touted as one of the largest deals in the history of the sector.
Edited by Sebastian Sinclair
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