Cryptocurrencies have been making headlines in 2024, with Bitcoin’s price skyrocketing from $45,000 to over $60,000 since the beginning of the year.
For those who are interested in investing in cryptocurrencies, buying them directly is a viable option. However, there are other ways to diversify your exposure while still taking advantage of their potential growth.
One such way is by investing in Block (formerly known as Square) stock. As a company that is fully committed to blockchain technologies, Block is heavily invested in the success of cryptocurrencies like Bitcoin.
In fact, in 2020, the company invested $50 million directly into Bitcoin, which accounts for about 1% of its total assets. This move was in line with the company’s belief that cryptocurrency is a powerful tool for economic empowerment and can help create a global monetary system.
With its popular Cash App, which currently has over 40 million users, Block has become a major player in the world of cryptocurrencies. Millions of its users have used the app to buy, sell, and transact in both traditional and digital currencies.
In the fourth quarter of 2023, Block reported a revenue of $5.8 billion, a 24% increase from the previous year. The biggest contributor to this growth was Bitcoin revenue, which amounted to $2.5 billion. This highlights the company’s strong position in the cryptocurrency market.
But what exactly does Bitcoin revenue include? It represents the total amount of Bitcoin sold to customers, which is not a very profitable business right now due to the costs involved in purchasing Bitcoin. However, this demonstrates Block’s potential for future growth.
Block’s goal is to become a central hub for all things crypto. This includes not only being a trusted Bitcoin seller but also providing lending services and supporting the development of blockchain technologies. The company has invested in initiatives like Spiral and TBD to achieve this goal.
Even Block’s ownership of Tidal, a music streaming service, is a strategic move towards the rise of cryptocurrencies. As the creator economy continues to grow, Block’s CEO Jack Dorsey believes that Bitcoin is the only viable currency for the internet ecosystem.
Now is a great time to consider investing in Block stock, as it is a long-term bet on the increasing adoption of cryptocurrencies. Currently, the stock is trading at a price-to-sales multiple of just 2.2, a significant decrease from its previous range of 5-15.
One of the reasons for this decline in stock price in 2022 was the drop in Bitcoin’s value, which raised doubts about Block’s long-term vision. Additionally, the company reported several quarters of significant losses, with some exceeding $200 million.
However, in 2023, founder Jack Dorsey returned as CEO, promising to cut costs and restore profitability. This has been successful so far, with the company reporting a net income of $10 million in 2023, a significant improvement from the previous year’s net loss of $541 million.
Although it may take time for Block’s complete vision to be realized, the company has the technology, vision, and leadership to capitalize on the long-term growth of cryptocurrencies. This makes the current undervalued stock a potential opportunity for investors.
