Payments company Square has invested $50 million into Bitcoin, according to an announcement today. It has bought 4,709 Bitcoin, with one percent of the company's assets.
“We believe that Bitcoin has the potential to be a more ubiquitous currency in the future,” said Square’s chief financial officer, Amrita Ahuja. “As it grows in adoption, we intend to learn and participate in a disciplined way. For a company that is building products based on a more inclusive future, this investment is a step on that journey.”
BREAKING: Square has invested $50 million in Bitcoin and will hold the digital currency on their balance sheet.
Every corporation will eventually do this. @jack continuing to lead the way!
— Pomp 🌪 (@APompliano) October 8, 2020
Square is owned by Jack Dorsey, the CEO of Twitter (and enthusiastic Bitcoin advocate). Square also owns CashApp, which has been offering Bitcoin for some time now. Dorsey has previously said that he regularly maxes out the weekly Bitcoin buy limits on CashApp.
Square has been investing in crypto for some time. It set up Square Crypto in March 2019 to support the development of the Bitcoin network. It has handed out a number of grants to Bitcoin developers and companies working in the space.
— Square Crypto (@sqcrypto) March 21, 2019
"More important than Square investing $50mm in #Bitcoin is sharing how we did it (so others can do the same)," Dorsey tweeted, with a link to Square's investment whitepaper.
The whitepaper stated that Square believes it's the right time to diversify its balance sheet away from its primary focus on US dollars. "We view bitcoin as an instrument of global economic empowerment; it is a way for individuals around the world to participate in a global monetary system and secure their own financial future. This investment is an important step in furthering our mission," it said.
And FAR more important than that is us investing directly in open source development with @sqcrypto, opening access to patents with COPA (https://t.co/aBqaURKruq), and making #bitcoin more accessible and useful to millions of people with @CashApp.
— jack (@jack) October 8, 2020
The whitepaper explained how Square bought the Bitcoin. It stated that Square used a liquidity provider that it already works with via CashApp. The company executed a buy order over 24 hours in order to reduce the direct impact on the price of Bitcoin.
Square stated that the Bitcoin is stored in cold storage (not connected to the internet), using its Subzero open-source technology. It is also insured against theft.
This investment follows business intelligence firm MicroStrategy buying $200 million of Bitcoin as an investment, before buying another $175 million of Bitcoin.
“To date, we have purchased a total of 38,250 bitcoins at an aggregate purchase price of $425 million, inclusive of fees and expenses,” MicroStrategy CEO Michael Saylor said, at the time.
Update: This article has been updated with further details from Jack Dorsey and Square's whitepaper.