Block Inc. Announces a Monthly Bitcoin Purchase Plan

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Block Inc., led by Twitter co-founder Jack Dorsey, has unveiled a new initiative to invest in Bitcoin on a monthly basis, utilizing a portion of its gross profit from Bitcoin products. This move comes as part of the company’s corporate balance sheet dollar-cost averaging (DCA) program.

In a memo released today, Block shared details of its DCA program, stating that it will allocate 10% of its monthly gross profit from Bitcoin products into purchasing Bitcoin for investment purposes. 

Block to Buy BTC

Dorsey, in a post on X, highlighted this strategy and encouraged other companies to adopt similar practices. He shared a link to Block’s “Bitcoin Blueprint for Corporate Balance Sheets,” outlining the process.

The blueprint reveals that Block plans to execute its Bitcoin purchases on a monthly basis using Time-Weighted Average Price (TWAP) orders, a method aimed at reducing market impact. This program commenced in April 2024.

Explaining the Reason

Explaining the rationale behind the initiative, Block’s memo emphasizes the challenges of market timing in the highly volatile Bitcoin market

“By allocating a portion of our monthly Bitcoin gross profits to Bitcoin investment on a predetermined and recurring cadence, we sidestep the challenges of market timing,” the memo states.

Block and Bitcoin Go Way Back

Block’s involvement in Bitcoin dates back to October 2020, when the company made its first Bitcoin purchase of 4,709 BTC. Over the following months, Block continued to invest in the BTC ecosystem, adding over 3,000 more BTC to its portfolio. 

As of now, Block holds 8,038 bitcoins, representing approximately 9% of the company’s total cash, cash equivalents, and marketable securities. At the current price, Block’s Bitcoin stash is valued at over $489 million.

A Growing Trend

This move by Block underscores a growing trend among companies to diversify their corporate treasuries by investing in Bitcoin. As Bitcoin continues to gain mainstream acceptance as a store of value and an inflation hedge, more companies are exploring ways to integrate it into their financial strategies. 

It is important to note that Block is currently being investigated by US prosecutors after a whistleblower surfaced documents alleging ongoing and widespread compliance violations at the firm’s payment arms, Square and Cash App.

Block’s DCA program sets an example for others to follow, providing a systematic approach to Bitcoin investment amidst market volatility.

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