Jack Dorsey’s Square Will Invest More in Bitcoin Mining

Jack Dorsey’s payments company Block (SQ) announced that it will devote its budget to building equipment for bitcoin (BTC) miners and a self-custody crypto wallet, abandoning the idea of ​​​​creating a decentralized internet that it calls “Web5” and investing less in music platform Tidal.

The decision came as Donald Trump won the US presidential election. Bitcoin mining was an industry that Trump promised to support during his campaign. Bitcoin miners welcomed Trump’s promises as they struggled to make profits following the halving that reduced mining rewards by 50% earlier this year.

Block announced earlier this year that it planned to reduce headcount by up to 10% by the end of 2024 and that “the company’s growth is outpacing the growth of jobs and revenues,” so the restructuring announcement came as little surprise.

Along with the announcement, Block also reported its third quarter financial report. According to FactSet data, the announced revenue of $5.98 billion was below Wall Street analysts’ expectations of $6.24 billion. The company’s stock price fell by up to 10% following the announcements.

Block, which does not directly mine bitcoins, contributes to the mining industry by selling equipment to companies. His ventures include creating his own mining computer. The payment company said in April that it had completed the development of a 3-nanometer mining chip that it has been working on since April 2023. In July, Core Scientific (CORZ), one of the largest bitcoin miners, announced that it would use Block’s mining rigs for its operations.

Emphasizing that it wants to focus on Bitkey, the self-custody wallet that it started developing in March, Square said that Bitkey will not only provide a standard wallet functionality, but also Block’s payment platform Cash App and crypto exchange Coinbase (COIN) for BTC buying and selling transactions. announced that it will be connected.

TBD was launched by Block in June 2022 to develop Web5 (not to be confused with the concept of Web3) as “a technology group that enhances the Web with decentralized identity, personal data storage, and verifiable data exchange capabilities.” At the same time, the company acquired Tidal, a music and entertainment platform, for approximately $300 million in 2021.