Block's Bitcoin Push: A Step Forward or Just a Hype?

Block, the parent company of Cash App and Square, has launched its first major consumer bitcoin advertising campaign, 'Bitcoin Does'. The campaign aims to showcase how these two platforms support everyday bitcoin use, positioning Block's bitcoin ambitions in front of mainstream audiences. This move is seen as a significant step in promoting the use of bitcoin as a core part of the broader financial services story.

The success of the campaign is expected to influence the longer-term investment narrative for Block. To own Block, investors need to believe that it can turn its two ecosystems, Square and Cash App, into a tighter loop of payments, banking, and bitcoin utility. However, the key near-term swing factor still lies in Cash App engagement and higher value banking users, not in one advertising push.

Analysts forecast Block's revenue to reach US$33.9 billion and earnings to reach US$3.8 billion by 2029, based on 10.6% yearly revenue growth and an earnings increase of about US$3.4 billion from US$357.1 million today. However, some analysts are more cautious, estimating revenue and earnings to be lower at US$32.0 billion and US$3.3 billion, respectively.

The biggest immediate risk to Block's investment narrative remains regulatory and fraud pressures around Cash App, as well as rising exposure to consumer credit, which could keep costs high and margins uneven. The success of the Apple Business integration with Square and the potential impact on merchants turning online discovery into measurable payment volume through Square and potentially Cash App are also key factors to consider.