Jack Dorsey’s Square Buys $170m Worth of Bitcoin

After Elon Musk’s Tesla announcement earlier this year, it was only a matter of time when other big names would follow suit and acquire Bitcoin. In the case of Square, it is “more bitcoin”. The firm has now announced it bought $170 million worth of the number one digital asset by market capitalization after first purchasing $50,000 in Bitcoin in October 2020.

The San-Francisco based financial services, merchant services aggregator, and mobile payment company has purchased approximately 3,318 bitcoins at an aggregate purchase price of $170 million. The firm had previously purchased $50 million in bitcoin, representing approximately five percent of Square’s total cash, cash equivalents, and marketable securities as of December 31, 2020.

“Aligned with the company’s purpose, Square believes that cryptocurrency is an instrument of economic empowerment, providing a way for individuals to participate in a global monetary system and secure their own financial future. The investment is part of Square’s ongoing commitment to bitcoin, and the company plans to assess its aggregate investment in bitcoin relative to its other investments on an ongoing basis”, said the official statement.

The $50 million purchase was made in October 2020 and only accounted for approximately 1% of their total assets. At the time, Square pointed to the “potential to be a more ubiquitous currency in the future”. The timing was perfect as the cryptocurrency shot up above $50,000 in the following months.

The Bitcoin bought in October 2020 must be currently valued at approximately $250,000 as the cryptocurrency trades near the $52,000 level. Yesterday, Bitcoin and most of the virtual currency market experienced a heavy sell-off as the New York state ordered Bitfinex and Tether to shut down their operations in the jurisdiction.

For years, Bitfinex failed to dismiss the suspicions that its stablecoin Tether was not fully backed by the US dollar on a one-to-one ratio. NY Attorney General Letitia James announced yesterday that after reviewing 2.5 million documents, it was undeniable that both firms failed to comply with regulatory requirements.

The cryptocurrency exchange denied any wrongdoing but settled the lawsuit and will be paying $18.5 million in penalties to the state of New York.