Despite Bitcoin strategy: Block shares fall after results announced

Yesterday, on Thursday, Block Inc. reported fourth-quarter results, but did not meet Wall Street analysts' prediction. Despite a positive business development, the stock price reacted negatively.

Jack Dorsey, the CEO of Block and founder of Twitter, is known as a supporter of Bitcoin. His company regularly buys BTC through a monthly savings plan, a strategy he announced last spring. In the short term, however, this didn't seem to help: although Block's revenue rose 4.5 percent to $6.03 billion, analysts were banking on revenue of $6.29 billion expected. Earnings per share also remained well below prediction at 71 cents.

As a result, Block's share price fell significantly, dropping 9 percent in after-hours trading. Currently, Block shares stand at $75.5, which represents a 26 percent increase over a year.

In October 2020, the company bought 4,709 bitcoins and added another 3,318 bitcoins to its reserve in early 2021. Meanwhile, Block Inc. owns 8,363 BTC worth $824 million.

The payment service promotes Bitcoin adoption in two ways: first, by offering BTC transactions to customers of the Square and Cash.App platforms, and second, by buying bitcoins themselves.

In addition, Block is developing its own mining equipment and hopes to soon compete with Bitmain. This Chinese company currently produces 60-70 percent of BTC mining equipment.