Jack Dorsey dramatically shuts down Block’s pending cryptocurrency unit | Wilnesh News

Amid the crypto-mania summer of 2021, with memecoins like Dogecoin and Shiba Inu soaring alongside Bitcoin and Ethereum, Square founder Jack Dorsey declare His payments company is launching a new business unit with the goal of “easily creating non-custodial, permissionless and decentralized financial services.”

“Our primary focus is #bitcoin,” Dorsey declared on Twitter. The name of the business unit will be TBD.

In December of that year, Dorsey went a step further, Renamed Square Inc. to BlockHe said this refers to a number of things, including blockchain, the technology that underpins Bitcoin. The Square Crypto business later became known as Spiral.

Three years later, Dorsey began to retreat.

exist cloggedDuring Thursday’s third-quarter earnings call, Chief Financial Officer Amrita Ahuja said Bullock had “recently made some decisions on some of our emerging initiatives” and was “gradually Ending our pending work”.

Block continues to own a large Bitcoin On its balance sheet, its holdings are now worth $630 million. The company said it will invest in Bitcoin mining projects and its Bitcoin wallet Bitkey, while continuing to allow users to purchase Bitcoin through Cash App.

This is a significant change of tone.

TBD aims to be a platform provided by Block for developers. Block calls it Web5 and says its mission is to create a more decentralized, secure and private web. Dorsey said in a tweet in mid-2022 that Web5 “may be our most important contribution to the web.”

But Wall Street’s view of cryptocurrencies began to deteriorate dramatically. With inflation soaring and interest rates rising in 2022, shareholders are demanding a faster return on their investments. After peaking in 2021, Block shares fell more than 80% before bottoming in October 2023.

Block said in late 2023 that it would Reduce the number of people – which had about 13,000 employees at the time – will lose as many as 1,000 employees by the end of 2024. Block said in its third-quarter shareholder letter that it would “scale down” its investment in Tidal after spending about $300 million in 2021 to acquire a majority stake in Tidal, the music streaming service founded by Jay-Z. .

During a conference call on Thursday, an analyst asked Dorsey about the company’s current Bitcoin strategy.

Dorsey said: “In terms of the overall strategy for Bitcoin, our focus is to make Bitcoin more accessible and ensure that more people can acquire Bitcoin, buy Bitcoin, sell Bitcoin, and send it peer-to-peer.

Dorsey added that he wants “the internet to have a native currency” because that would allow Block to move money faster and offer Cash App and other products in more markets.

A Block spokesman reiterated the company’s public statements and pointed to Dorsey’s comments on the earnings call.

What’s clear is that Dorsey can only do so much with cryptocurrencies while trying to appease a more critical Wall Street. Block shares were down about 1% at the close on Friday after the company reported revenue that missed expectations and issued gross profit guidance that was lower than some analysts expected.

In his 1,400-word letter to shareholders, Dorsey focused entirely on the company’s lending services to small businesses. A big part of that is Afterpay’s buy now, pay later product, which Block acquired in 2021 for $29 billion.

Dorsey did not mention cryptocurrencies or Bitcoin once.

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