Twitter (TWTR  ) CEO Jack Dorsey's Block (SQ  ) was downgraded by Mizuho's analyst Dan Dolev last week, citing bitcoin sentiment.

"After years of rightfully being deemed the most innovative name in payments, we believe user fatigue, plateauing inflows, loss of the best-of-breed POS [point-of-sale] status, and BNPL [buy-now-pay-later] misexecution are blocking SQ's growth," Dolev wrote in a research note.

From Dolev's perspective, Block still has great value and possibility, but he still does not believe that it is making good usage of its potential. Dolev also observed that bitcoin constituted for merely 5% of Block's gross income within the initial part of 2022, but holds too much of management's attention at the same time. What has caused the most damage to Block is its excessive focus on bitcoin, which has ultimately detracted from stock performance, according to Dolev.

"Assessing the stock's behavior shows it closely tracks bitcoin," Dolev wrote in a statement. "This is unfortunate as it distracts both management and investors from focusing on SQ's broader ecosystem."

Dolev is also concerned about other potential problems, like a recent decrease in net additions. He has indicated that, even as customer-acquisition prices are increasing, the slow net-add growth rates are still on the rise.

Dolev has indicated that Block could have gained further profit when bitcoin prices were steadily increasing. "Unfortunately, now that the price of bitcoin is ~70% off its highs, we suspect the inverse dynamic is underway," Dolev wrote in a statement.

This past Wednesday, Block shares were down by 3.3% and decreased by another 4.6% in Thursday trades.

Another point of concern is that estimates for buy-now-pay-later are steadily decreasing, but in spite of this factor, Block has already taken a company (Afterpay) under its wing. Block then experienced a lower rating, which was speculated to be caused by its Cash App outflows.