Block Hits New Milestone for Bitcoin

Mizuho noted that Block's recent analyst day created a "positive turnaround" and indicated that these developments show the company is better positioned to move Bitcoin into widespread, everyday use.

Analyst Dan Dolev emphasized that the event was significant not only because of the new Artificial Intelligence products, ManagerBot and MoneyBot, but also due to the company's sincere acknowledgment of past mistakes.

Dolev explained that the CEO of Block apologized for issues such as "insufficient product velocity and previous organizational challenges." However, he expressed that Block's long-term Bitcoin strategy is at the center of Mizuho’s optimism, indicating that the opportunity to popularize Bitcoin usage and reduce costs presents an "exciting" prospect.

Mizuho expressed even more excitement about the opportunity to reduce acceptance costs using Block's Bitcoin infrastructure, highlighting rapid banking penetration, the company's credit operations being "surprisingly robust and providing high returns," and the vast infrastructural opportunities of a "one-stop shop for banking + wallet + POS + Bitcoin + mining."

Dolev stated that the economic incentives for Bitcoin payments "appear real." He noted that "XYZ's pilot implementation of the Bitcoin payment infrastructure could be transformational." Dolev pointed out that the 58 million users of Cash App can now use the Lightning Network for payments, considering it could be one of the most significant changes in payments in the last 50 years.

Dolev explained that Lightning offers near-instant, low-cost payments, eliminating refund requests and intermediaries, suggesting that this situation could "encourage sellers to offer discounts for BTC payments, with the savings passed on to customers."

Mizuho provided an assessment stating, "We believe this opportunity is additive and transformative, and Block is at the forefront of this change." Dolev further noted that "the main advantage and focus is on building viral networks," pointing out that for Block, "all roads lead to mainstream banking" as it integrates financial services around Cash App and the merchant ecosystem.

Mizuho maintained its 'Outperform' rating for Block and raised its price target from $100 to $88. The firm took a more optimistic view regarding Block's path to making Bitcoin a routine payment tool.