Jack Dorsey’s payment firm Block is planning to invest double in Bitcoin mining and self-custody business named Bitkey. The move comes at a time when Bitcoin prices have hit a new all time high, amid market optimism and upbeat investor sentiments.
Block reported that demand for its Bitcoin mining initiative is high and that the plans that are in the pipeline are in good shape. This announcement came, alongside the firm’s quarterly results.
The firms new plans come in tandem with the now US President Donald Trump’s vision of making the US a hub for Bitcoin mining.
Block’s New Bitcoin Mining Investment Plans Align With Firm’s Decentralization Goal
Block new vision of excelling in the Bitcoin mining business are highly aligned with its overarching plan to encourage Bitcoin’s decentralization and its increasing faith in the long-term prospects of the cryptocurrency.
Block declared earlier this year that it would create a complete bitcoin mining system to facilitate decentralization in the mining sector after finishing the design of a three-nanometer Bitcoin mining chip.
In July, the business teamed up with Core Scientific to provide the mining company with its cutting-edge mining chips.
Following a 10% workforce reduction in December of last year, Block plans to reduce investments in music streaming platform Tidal and wind down TBD, the arm tasked with creating a decentralized web platform known as “Web5”. As part of this strategic shift, the company has reportedly laid off employees in these divisions.
Block’s Plans Might Face Hindrance From Post Halving Credit Reduction
It is interesting to note that Block’s plans to dive into the Bitcoin mining sector come at a time when the industry is facing significant issues post Bitcoin halving.
Previous CoinShares report suggests that the Bitcoin mining sector is still facing significant obstacles this year as limited credit availability and growing production costs have an impact on profitability.
But, miners across the globe have been aggressively growing their infrastructure in anticipation of future price increases despite these setbacks. Due to this expansion, mining difficulty levels have reached all-time highs, which has increased miners’ production costs.
However, despite these setbacks, another parameter that has kept the industry afloat is the price of Bitcoin. The result of the US elections and Donald Trump victory has hyped up the entire industry, making Bitcoin hit new all time highs.
But, investors, Bitcoin mining companies and all market participants alike will keep a keen eye on how the industry develops in the coming years.