Jack Dorsey, co-founder of Twitter Inc., speaks during the Bitcoin 2021 conference in Miami, Florida, U.S., Friday, June 4, 2021.
Eva Marie Uzcategui | Bloomberg | Getty Images
During the crypto-crazy summer of 2021, when memecoins like dogecoin and Shiba Inu were floating along with bitcoin and ethereum, Square founder Jack Dorsey announced that his payments company was starting a new business unit, with the goal of “making it easily create non-custodial, permissionless and decentralized financial services.”
“Our main focus is #Bitcoin,” Dorsey declared on Twitter. The name of the business unit would be TBD.
In December of that year, Dorsey went a step further, changing the name of Square Inc. in Block, a reference, he said, to a variety of things, including blockchain, the technology that underpins bitcoin. The Square Crypto business became known as Spiral.
Three years later, Dorsey is in retirement.
ACTIvE BlockOn the third-quarter earnings call Thursday, CFO Amrita Ahuja said Block “has made some final decisions regarding some of our emerging initiatives” and “is winding down our efforts TBD.”
The block continues to hold a large amount of bitcoin on its balance sheet, with the current value of its holdings at $630 million. And the company said it will invest in a bitcoin mining initiative as well as Bitkey, its bitcoin wallet, while continuing to allow users to buy bitcoins through the Cash app.
It is an obvious change of mind.
TBD was created to be Block’s platform for developers. Block called it Web5 and said the mission was to create a more decentralized, secure and private internet. Dorsey said in a tweet in mid-2022 that Web5 “will likely be our most significant contribution to the Internet.”
Square’s five-year stock chart
But Wall Street’s view of crypto had begun to deteriorate dramatically. With inflation rising in 2022 and interest rates rising, shareholders demanded faster returns on their investments. After peaking in 2021, the bloc’s shares lost more than 80% of their value before bottoming out in October 2023.
Block said in late 2023 that it would reduce its headcount — then about 13,000 employees — to 1,000 by the end of 2024. Fortune reported that Block laid off employees at TBD in recent weeks. And in its third-quarter shareholder letter, Block said it was “reducing” its investment in Tidal, the music streaming service founded by Jay-Z, after spending about $300 million on a majority stake in the business in 2021 .Tidal was part of TBD.
Dorsey was asked by an analyst on Thursday’s call about the company’s current bitcoin strategy.
“What we’ve been focused on in terms of our overall strategy for bitcoin is making it more accessible, making sure that more people can access bitcoin, buy it, sell it, obviously, but also they send it from colleagues,” Dorsey said. .
Dorsey added that he wants “the internet to have a native currency” because it would allow Block to move money faster and offer the Cash App and other products in more markets.
A Block spokesperson repeated the company’s public statement and noted Dorsey’s comments from the earnings call.
What has become clear is that Dorsey can only do so much with crypto while trying to appease a more discerning Wall Street. Block shares fell about 1% at the close on Friday after the company reported revenue that missed estimates and issued weaker gross profit guidance than some analysts expected.
In his 1,400-word letter to shareholders, Dorsey focused entirely on the company’s lending offerings for small businesses. An important part of this is Afterpay’s buy-now-pay-later product, which Block acquired for $29 billion in 2021.
Dorsey didn’t mention crypto or bitcoin once.
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