Key Takeaways
- Block shifts focus to bitcoin mining support, cutting Web5.
- Trump's election win signals a friendlier climate for mining.
- Block's Q3 revenue of $5.98B missed Wall Street's $6.24B estimate.
Block Inc., Jack Dorsey’s payments company, is reallocating its focus to strengthen its bitcoin mining equipment line and the self-custody wallet Bitkey, cutting back on its decentralized internet initiative “Web5” and reducing investment in the music streaming app Tidal.
The decision aligns with Block’s third-quarter report, which also revealed underperformance in revenue at $5.98 billion, short of Wall Street’s expected $6.24 billion, leading to a 10% stock drop.
Closing TBD
The restructuring involves closing TBD, the team dedicated to developing “Web5” since 2022.
Intended to enhance digital identity and data privacy through decentralized technology, the project no longer fits within Block’s streamlined strategy, which aims to meet stronger demand for bitcoin mining products.
Trump win
Block’s shift follows Donald Trump’s recent U.S. presidential win, with his administration expected to promote a more supportive stance toward the mining sector.
The industry has faced shrinking profit margins since the latest halving event, which cut rewards for bitcoin miners by half.
Block noted a “healthy pipeline of demand” for its newly developed 3-nanometer mining chips, completed in April, which are now set to power Core Scientific’s mining operations.
Block’s self-custody wallet Bitkey, launched in March, remains another key area of focus, linking with Cash App and Coinbase to facilitate BTC transactions.
