Block's crypto ambitions are being scaled back dramatically by Jack Dorsey.

• In 2021, Jack Dorsey, CEO of the company, announced the creation of a new crypto unit called TBD, with a primary focus on Bitcoin.
• On Thursday, Block announced that it was "winding down" TBD after a period of layoffs.
• In his letter to shareholders, Dorsey emphasized the importance of the company's lending services.

In the summer of 2021, as memecoins like dogecoin and Shiba Inu surged alongside bitcoin and ethereum, Square founder Jack Dorsey announced that his payments company was launching a new business unit aimed at simplifying the creation of non-custodial, permissionless, and decentralized financial services.

Dorsey declared on Twitter that the main focus of the business unit would be #Bitcoin. The name of the unit is yet to be determined.

In December of that year, Dorsey renamed Square Inc. to Block, referencing blockchain technology and other things. The Square Crypto business was renamed Spiral.

Three years later, Dorsey is in retreat.

During the third-quarter earnings call on Thursday, CFO Amrita Ahuja announced that Block has made recent decisions regarding some of its emerging initiatives and is winding down its TBD efforts.

Block continues to hold a significant amount of Bitcoin on its balance sheet, with its current holdings valued at $630 million. Additionally, the company announced that it will be investing in a Bitcoin mining initiative and Bitkey, its Bitcoin wallet, while still allowing users to purchase Bitcoin through Cash App.

It's a notable change of tune.

Block's Web5 platform was designed to be TBD's platform for developers, with the mission to create a more decentralized, secure, and private internet. Dorsey stated in a tweet in mid-2022 that Web5 "will likely be our most important contribution to the internet."

As inflation surged in 2022 and interest rates increased, Wall Street's view on crypto began to deteriorate rapidly. Despite reaching an all-time high in 2021, Block shares plummeted by more than 80% before finally stabilizing in October of the previous year.

In late 2023, Block announced that it would reduce its staff by up to 1,000 by the end of 2024. Fortune reported that Block recently laid off employees at TBD. Additionally, in the third-quarter shareholder letter, Block revealed that it was cutting back on its investment in Tidal, the music-streaming service founded by Jay-Z, after spending about $300 million on a majority stake in the business in 2021. Tidal was part of TBD.

On Thursday's call, an analyst inquired about Dorsey's company's current bitcoin strategy.

Dorsey stated that the focus of the strategy for bitcoin is to make it more accessible, ensuring that more individuals can buy, sell, and send it peer-to-peer.

Dorsey stated that he believes the internet should have its own currency, which would enable Block to transfer funds more quickly and expand Cash App and other products to additional markets.

The Block spokesperson restated the company's public statement and referenced Dorsey's remarks from the earnings call.

It has become evident that Dorsey faces limitations in managing crypto while catering to the more demanding Wall Street. On Friday, Block's shares dropped by approximately 1% at market close, following the company's announcement of revenue that did not meet expectations and weaker gross profit projections than some analysts had anticipated.

Dorsey's 1,400-word letter to shareholders primarily focused on Block's lending offerings for small businesses, with a significant portion of that being the buy now, pay later product from Afterpay, which Block acquired for $29 billion in 2021.

Dorsey didn't mention crypto or bitcoin once.

WATCH: Block and Affirm slide on earnings