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Block (SQ) to Boost Cryptocurrency Efforts With Latest Plans

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Block (SQ - Free Report) intends to develop a bitcoin mining system in a bid to bolster its presence in the cryptocurrency market.

The company strives to carry out the process of mining, maintaining, setting up and purchasing bitcoin efficiently with its bitcoin mining system.

Block has started hiring for a team that will focus on building the underlined system. The team will focus on ensuring the reliability of the equipment, dealing with its power consumption, and solving issues associated with accessing the system.

We note that the latest move bodes well for the company’s growing efforts in the bitcoin space, which have been driving its business growth well.

Notably, the company generated bitcoin revenues of $1.82 billion (47% of total revenues) in third-quarter 2021, up 11% year over year.

Block Inc. Price and Consensus


Block Inc. Price and Consensus

Block Inc. price-consensus-chart | Block Inc. Quote

Growth Prospects a Plenty

Cryptocurrencies, which hold the potential to revolutionize the process of peer-to-peer and remittance transactions, are gaining strength from the decentralized system, low fees, transparency of distributed ledger technology, protection from consumer chargebacks and quick international transfers.

Moreover, the higher uptake of digital and contactless trading and payments via blockchain-backed digital currencies in this coronavirus-hit world is expected to sustain the momentum in the cryptocurrency market.

Per a Fortune Business Insights report, the cryptocurrency market is expected to reach $1.9 billion by 2028, seeing a CAGR of 11.1% between 2021 and 2028.

The solid adoption of bitcoin, the most popular and widely used digital currency despite being highly volatile, has been a key catalyst for crypto miners.

The growing proliferation of other digital currencies like litecoin, ethereum and zcash will continue to boost prospects of crypto miners further.

All the factors are encouraging companies to foray into the crypto mining market, which holds promise.

Per a Data Bridge Market Research report, the global crypto mining market is likely to witness a CAGR of 11.5% between 2021 and 2028.

The latest plans with the bitcoin mining system position Block well to capitalize on the above-mentioned growth prospects.

Intensifying Competition

Block, which carries a Zacks Rank #4 (Sell) at present, will face strong competition from the existing crypto mining players such as NVIDIA (NVDA - Free Report) , Marathon Digital Holdings (MARA - Free Report) and Hut 8 Mining (HUT - Free Report) , which are making concerted efforts to bolster their crypto mining capabilities.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Hence, strong competitive pressure from these companies might turn investors worrisome about Block. Coming to the price performance, Block has lost 39.9% in a year.

Notably, NVIDIA, which has returned 106.6% in the past year, is gaining from the growing momentum of its GPUs in the cryptocurrency space. NVDA’s launch of Cryptocurrency Mining Processor (CMP), which is ideal for professional mining, remains noteworthy. The processors are well-equipped to boost the mining power efficiency as these feature a lower peak core voltage and frequency.

Marathon Digital, which has gained 25.5% in the past year, is benefiting from the increasing deployment of miners, the growing production of bitcoins, strong bitcoin holdings and a hike in its hash rate. Apart from this, the purchase of 30,000 S19j Pro miners from BITMAIN remains a major step toward expanding bitcoin production. Further, MARA recently signed a contract with BITMAIN to buy ANTMINER S19 XP (140 TH/s) bitcoin miners.

Meanwhile, Hut 8 Mining, which has gained 50.5% in a year, is gaining from the solid momentum across its self-mining operations and expanding hosting services. Further, HUT’s increasing bitcoin holdings and prospects around its purchase of NVIDIA GPUs remain noteworthy. Recently, Hut 8 Mining received the entire fleet of high-performance NVIDIA GPUs, which got deployed at its Medicine Hat site.

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