While Elliott’s campaign failed in the short term, Dorsey’s interest in Bitcoin intensified. He changed his Twitter biography section – a keenly-watched piece of internet territory, to simply “#Bitcoin”.
As 2020 proved to be a breakthrough year for the currency, surging by 200pc amid a stay-at-home trading boom, Square became a face on Wall Street. It revealed that it had spent $50m on 4,709 Bitcoins, making it the most high-profile company to park its cash in the cryptocurrency. Tesla would follow its lead later that year.
“We believe that bitcoin has the potential to be a more ubiquitous currency in the future,” Square finance chief Amrita Ahuja said at the time.
It was the clearest sign yet that Square was tying its future more closely to Bitcoin. Since then, it has spent more of its savings on it, and unveiled a string of initiatives it says are designed to make the controversial cryptocurrency more accessible – and acceptable.
It has funded research into Bitcoin’s carbon footprint claiming that, contrary to widespread criticism of the energy-hungry asset, it could incentivise investment in renewables, and has said it wants to develop technology making it easier for more people to get into “mining” – the process of creating new Bitcoins that currently requires powerful computer systems.
In a recent note to investors, analysts at Barclays wrote that “crypto is becoming a larger and larger part of Square’s narrative”.
They added: “The company’s various crypto activities … point toward a long-term strategy that assumes that Bitcoin will be much more widely embraced in the future as a daily spending instrument and financial services tool.”
Dorsey has also become more personally forthright, sparring with venture capitalists who back rival cryptocurrencies, and setting up a fund to defend Bitcoin developers from lawsuits.
Still, Square has, at times, appeared to downplay its link to Bitcoin. The company has pursued other initiatives, such as buying the Tidal music streaming service led by the rapper Jay-Z, who now sits on the company’s board, and acquiring buy-now-pay-later firm Afterpay.
Those close to the company point out that its bread and butter work – of letting small businesses take payments and letting consumers send money back and forth through its cash app – are also booming. While Bitcoin trading accounted for almost half of the company’s revenue in the third quarter of the year, its share of profit was much lower at around 4pc.
And in stark comparison to Facebook, which changed its name to “Meta” in a full-throated tilt towards the “metaverse” of virtual worlds, Square was much more ambiguous about its new name, saying “Block” could mean any number of things.
Former executives say Dorsey talks about the company being the “bank of the future” – not necessarily one that is all-in on cryptocurrency.
But it may become harder to divorce the two. A month ago, Dorsey tweeted that Bitcoin would replace the US dollar, a position that suggests he is nothing if not all in.
Block’s soaring share price during the pandemic – its value crossed $100bn last year – has loosely followed the cryptocurrency. Shareholders were happy enough to be along for the ride on the way up. If its recent crash continues, Dorsey might find himself pining for the days of running Twitter.
