Jack Dorset-led company Block has decided to commit to Bitcoin mining and its self-custody crypto wallet Bitkey. According to a letter sent by Dorsey to shareholders, the company will focus its resources on the two ventures. The company also intends to cut funding for its Web5 project TBD and reduce the investment in its music streaming project Tidal.
The decision comes after the impressive win of presidential candidate Donald Trump in the United States presidential elections. Trump already hinted at a crypto-friendly environment during his campaign. Also, the campaign promises were repeated severally in meetings with crypto mining firms. Trump assured miners of support coupled with the provision of energy sources towards mining.
The letter discussed the company’s performance in the third quarter. Block performed a little below par, hitting $5.98 billion in revenue instead of its projected $6.24 billion. The figure did not account for Bitcoin, which hit $3 billion, representing a rise of 11% year-on-year. Despite the slow performance of its stock, Block managed to exceed its forecast.
Block set to focus on Block Proto
Block has been quite busy in the Bitcoin space, focusing on creating ASIC mining chips. Through its Block Proto arm, it has inked several collaborations with top mining firms like Core Scientific, producing three nanometer mining ASICs. Core Scientific recently revealed its decentralized Bitcoin mining dream, an initiative Block Proto has keyed into.
The ASIC chips produced by Proto ensure reliability and improve efficiency and uptime for large-scale firms. Block Proto team lead Thomas Templeton discussed the importance of the firm’s partnership with Core Scientific in ensuring decentralized mining. He noted that the firm’s agreement will help it achieve its goals while pushing for the advancement of the mining industry.
Block also tweaked its Bitcoin purchase strategy, pushing 10% of the profits from the asset into buying more. The entity sees Bitcoin as a perfect open system for money without the control of any single entity.
Bitcoin mining probability dropped since halving
Bitcoin mining profitability has been dropping since the halving event in April. According to a JP Morgan report, September signaled the third time in a row that the profitability fell. The financial institution highlighted several factors responsible for the drop, including the hashrate and increase in mining difficulty.
In August, JP Morgan reported that Bitcoin profitability was $43,600, a small figure compared to its $342,000 per exahash per second in 2021. Notably, the August figure was the lowest ever recorded.
September witnessed another fall, dragging the profitability figure to $42,100, 6% lower than the August figure. September became the third month that the reward had dropped significantly.
JP Morgan’s report noted that the profitability dropped despite the rise in the asset’s price and the drop in market-wide volatility. When the report was released, Bitcoin had gained 44% on the year.
Regardless, Bitcoin mining companies in the United States have increased their global mining hashrate. In June, the cumulative hashrate was 25% of the global figure. However, the value is still quite low compared to China’s 50%.