In its shareholder letter published on November 7, the company announced that it would reduce the resources allocated to its music streaming service TIDAL and terminate the TBD project, which aims to decentralize the internet. This new direction reveals that the company wants to be more involved in Bitcoin mining.

Block acquired TIDAL in 2021 in a deal worth approximately $300 million. However, TIDAL could not show the expected performance in the face of intense competition. The platform, which had difficulty expanding its user base, also experienced financial difficulties.

Latest reports reveal that TIDAL reduced the number of employees and the platform recorded a loss worth $ 132.3 million.

TBD, which was founded by Block with the aim of decentralizing the internet, was launched in 2022 as a project called Web5. However, the company did not provide a detailed explanation as to why TBD would be closed. Block’s decision to change its focus is associated with the failure of these initiatives to achieve the targeted success.

This strategic change of Block coincides with Donald Trump’s victory in the US presidential elections. In June, Trump stated that he wanted all remaining Bitcoins to be mined in the United States, emphasizing that crypto mining could help the country become a leader in the energy sector.

These statements led to a huge rise in Bitcoin mining stocks and contributed to the revival of the industry.

Block aims to capitalize on this momentum in crypto mining activities in the US. Although the company does not conduct Bitcoin mining directly, it develops mining equipment through its Proto initiative.

In early 2024, Block announced that it was developing a 3-nanometer mining chip. This advanced chip will be integrated into the operations of Core Scientific, a leading mining company.

Block will direct some of its restructured resources to a self-storage hardware wallet called Bitkey.

Bitkey, which was launched in March 2024, allows users to store their Bitcoins securely, while also facilitating BTC buying and selling through traditional channels thanks to its partnerships with exchanges and payment providers.

This new strategic move by Block comes after the company failed to meet third-quarter revenue expectations. The company earned $5.98 billion in revenue, falling short of the $6.24 billion expected by Wall Street.

These financial difficulties parallel layoffs at Cash App, Foundational and Square divisions in January and the layoff of approximately 40 employees at TIDAL in December 2023.

Block’s focus on Bitcoin mining coincides with US Bitcoin mining companies expanding their operations.

In September, CleanSpark acquired seven new mining rigs to increase its hashrate to 37 EH/s by the end of 2024. In August, Marathon Digital Holdings raised $292.5 million to finance their strategic expansion.

Many analysts think that with this new strategic direction, Block aims to increase its growth potential and become a major player in the crypto mining industry. In particular, the increasing interest of the USA in crypto mining may support Block’s steps in this field.

This strategic change is considered an important move by Block to overcome financial difficulties and support its future growth.

The company aims to gain a strong place in the crypto ecosystem by focusing on projects such as Bitcoin mining equipment development and Bitkey wallet.