Jack Dorsey blocks DCA to Bitcoin every month

Early today morning Asian time, Block Inc. CEO Jack Dorsey revealed the company's latest plans. Dorsey stated that he intends to buy Bitcoin (BTC) every month using the dollar-cost averaging (DCA) method.

This move demonstrates the blockchain's commitment to integrating bitcoin into its financial strategy. Additionally, it highlights Dorsey's position as a prominent “Bitcoin maximalist.”

Block list of Bitcoin DCA strategy has been announced

Dollar cost averaging is an investment approach in which the same dollar amount is invested in a particular asset periodically, regardless of the asset's price fluctuations. This method helps to reduce the variable impact on the overall purchase.

Therefore, companies with Bitcoin holdings like Block can strategically navigate the volatile nature of Bitcoin using DCA. Additionally, this approach offers the potential to achieve a lower average cost per share over time.

Read more: What is Dollar-Cost Averaging (DCA)?

In its official statement, Block provided more details on how they will implement the DCA strategy. The company has announced that it allocates 10% of its total profits from Bitcoin-related products to monthly purchases of Bitcoin.

“With the DCA program, we plan to buy Bitcoin every month starting in April 2024. We will execute these in a short window due to lower transaction costs and improved Bitcoin liquidity compared to 2020 and 2021. They chose to buy Bitcoin in a two-hour window with historically high levels of liquidity,” the company said.

The shift to a Bitcoin-centric portfolio is not new to Blockchain. The company made headlines in October 2020 when it bought 4,709 BTC at an average price of $10,618 per Bitcoin.

Subsequent investments in February 2021 added 3,318 BTC at a higher price of $51,236 each. In the year As of March 31, 2024, Block has admitted that it has 8,038 BTC on the company's balance sheet.

These early investments have paid off. During the same reporting period, Block's initial investment of $233 million in Bitcoin reached approximately $573 million, an increase of 146 percent. A revaluation gain from a $233 million Bitcoin investment contributed to net income in the first quarter of 2024.

Read more: Who will own the most Bitcoins in 2024?

Block participation in the Bitcoin ecosystem has evolved significantly beyond purchases. It recently launched a “Bitcoin conversions” feature for Square users.

This feature allows merchants to convert a portion of their sales directly into Bitcoin, which increases the utility of blockchain services in the crypto sector. In a recent letter to investors, Jack Dorsey explained the reasoning behind this strategic direction.

“We believe the world needs an open protocol for money that is not proprietary to any entity…an open protocol for money will help us quickly serve more people around the world,” Dorsey said.