Jack Dorsey’s company, Block (SQ), is shifting its focus towards developing equipment for bitcoin miners and its self-custody crypto wallet. This decision comes as the company plans to give up on its “Web5” project, which aimed to create a new decentralized internet. The shift in focus is partly due to the promising outlook for crypto in the U.S. following Donald Trump’s presidential victory.
The company stated that it will be scaling back its investment in Tidal, a music streaming app, and winding down TBD, the business working on the Web5 project. This strategic move will allow Block to invest more in its bitcoin mining initiative and Bitkey, its self-custody wallet for bitcoin. The company had previously announced plans to reduce headcount by up to 10% by the end of 2024, citing the rapid growth of the company compared to its revenue.
Despite these changes, Block reported third-quarter financial results that fell short of Wall Street analysts’ estimates. The company’s revenue of $5.98 billion missed the expected $6.24 billion. This led to a 10% drop in the company’s stock price following the announcement.
While Block does not engage in bitcoin mining directly, it sells equipment to mining firms and has been working on developing its own mining computer. The company completed the development of a 3-nanometer mining chip in April, which has since been used by one of the largest bitcoin miners, Core Scientific.
In addition to its focus on bitcoin mining, Square is also placing emphasis on its self-custody wallet, Bitkey. The wallet, which started shipping in March, offers standard wallet functionality and integrates with Block’s payments platform Cash App and crypto exchange Coinbase to facilitate buying and selling of BTC.
The decision to shift away from the Web5 project and invest more in bitcoin mining and self-custody wallets reflects Block’s strategic realignment based on market demand and growth opportunities in the crypto industry. As the company continues to navigate this evolving landscape, its focus on key initiatives like bitcoin mining and self-custody wallets will be crucial for its future success in the rapidly changing crypto market.
