Ark Invest’s Big Bet on Bitcoin Tools Could Be a Game Changer for Block (SQ)

• Earlier this week, Cathie Wood’s Ark Invest acquired US$30.9 million worth of Block Inc. shares across three of its exchange-traded funds, deepening exposure to crypto-related stocks as Block rolls out new Bitcoin payment tools for businesses.
• This move highlights institutional confidence in Block’s crypto-driven strategy and underscores the growing significance of Bitcoin acceptance in financial technology platforms.
• We’ll explore how Ark Invest’s increased stake in Block could influence the company’s long-term outlook as it expands its Bitcoin-focused offerings.

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Block Investment Narrative Recap

For someone to be a shareholder in Block, the core belief is in the company’s ability to drive digital payments innovation, especially through its integration of Bitcoin and growth within Cash App. While Ark Invest’s recent US$30.9 million purchase highlights confidence in Block’s crypto-centric strategy, the news does not fundamentally shift the most important short-term catalyst, growing adoption of Bitcoin tools within Square, or the biggest risk, namely ongoing regulatory and adoption challenges within crypto.

The launch of Square’s integrated Bitcoin payment solution for businesses is directly relevant, as it demonstrates Block expanding its digital asset capabilities right as institutional investors increase their exposure to the stock. This aligns with the wider catalyst of deepening crypto integration as a key driver for future user engagement and transaction-based revenue, especially as competition in payments and digital finance intensifies.

However, investors should also consider that alongside this growing crypto focus, regulatory uncertainty and shifting consumer sentiment may affect Block’s crypto-driven revenue more than expected if…

Read the full narrative on Block (it’s free!)

Block’s outlook projects $32.8 billion in revenue and $2.4 billion in earnings by 2028. This requires an 11.3% annual revenue growth rate and a $0.6 billion decrease in earnings from the current $3.0 billion.

Uncover how Block’s forecasts yield a $88.40 fair value, a 16% upside to its current price.

Exploring Other Perspectives

Seventeen Simply Wall St Community fair value estimates for Block range from US$60.37 to US$104 per share, signaling widely different outlooks. As you explore these views, remember the ongoing risk that regulatory changes could disrupt Block’s core crypto-enabled growth trajectory.

Explore 17 other fair value estimates on Block – why the stock might be worth as much as 37% more than the current price!

Build Your Own Block Narrative

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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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