Should You Buy and Hold Block Stock for 20 Years? 1 Crucial Factor You Can't Ignore.

Core Viewpoint - Block, once a high-flying fintech stock, has seen a significant decline since its peak in August 2021, trading 76% below its record as of July 14, with a 21% decline in 2023. Despite this, the company's profits are increasing, and it currently trades at a forward price-to-earnings ratio of 24.7, raising questions about long-term investment potential based on Bitcoin's trajectory [2][10]. Group 1: Company Overview - Block operates two main ecosystems: Square, which provides tools for small- and medium-sized merchants, and Cash App, a personal finance platform with 57 million users [4][5]. - Square has shown a year-over-year gross profit growth of 9% in the first quarter, benefiting from customer switching costs [5]. Group 2: Bitcoin Strategy - CEO Jack Dorsey emphasizes the importance of Bitcoin for Block's future, viewing it as a means to enhance economic empowerment and financial freedom [6][7]. - Block owns 8,584 bitcoins valued at over $1 billion, and its success in the coming years is closely tied to Bitcoin's price trajectory [8][10]. - The company is developing initiatives to support Bitcoin adoption, including allowing merchants to accept cryptocurrency payments and selling a Bitcoin self-custody hardware wallet [10][11]. Group 3: Financial Impact - Currently, Bitcoin-related activities contribute only $65 million in gross profit, approximately 3% of Block's total [10]. - If Bitcoin's price rises, Block could see significant benefits from hardware wallet sales and increased demand for its services [11][12].