In brief
- Square's Chief Financial Officer Amrita Ahuja says that there's "a case for every balance sheet to have Bitcoin on it."
- Her endorsement comes on the same day as a PwC report predicting that the cryptocurrency industry will become more institutionalized.
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Amrita Ahuja, CFO at payments company Square, argued that Bitcoin should be a part of every major company’s financial war chest in an interview, published today, in Fortune.
"There's absolutely a case for every balance sheet to have Bitcoin on it,” she said while explaining how Square’s strategy was to support broader adoption of the cryptocurrency.
Square, encouraged by its CEO, Bitcoin champion Jack Dorsey, has, to date, invested $220 million in Bitcoin. “The investment that we made on our balance sheet for Bitcoin represents about 5% of our cash; we intend to hold for the long term,” said Ahuja.
Square’s investment and support of Bitcoin is part of a growing trend, according to a PwC market overview released today, which predicts that the industry will become more institutionalized.
Corporate players, bigger investors, and crypto platforms, bolstered by recent gains, will increasingly drive activity, Henri Arslanian, PwC global crypto leader, told Bloomberg today. The PwC report also found that the value of mergers and acquisitions in the crypto industry totaled $1.1 billion last year—more than double 2019’s figure, and the average deal size almost tripled during the same period.
Increasing institutional involvement
MicroStrategy arguably kicked off the institutional trend, with an initial $425-million Bitcoin investment in August and September 2020. The company’s CEO Michael Saylor has aggressively promoted the cryptocurrency since then and has topped up the initial investment.
Then, in February, Elon Musk became Bitcoin’s highest-profile backer, when his company Tesla invested $1.5 billion in Bitcoin; analysts estimated that, within a month, the EV manufacturer had made more profit from its Bitcoin buy than from its total 2020 car sales.
These developments have induced a level of FOMO not previously seen in institutional boardrooms during Bitcoin’s 12-year history, and they have compelled CFOs to look more seriously at Bitcoin; last week, TIME magazine mandated that "comfort with Bitcoin" was a prerequisite for the CFO role it was advertising.
Square’s adoption drive
Meanwhile, Square has doubled down on its support of the cryptocurrency, with increased funding for the development of Bitcoin core.
Square’s Cash App has allowed users to buy Bitcoin since 2018, and according to Ahuja, the peer-to-peer payments platform added another million users in January alone; it now has 4 million customers in total.
Earlier this month, Square announced that it was abolishing Bitcoin transaction fees on Cash App, as part of a drive to encourage the use of the cryptocurrency.
It’s also put in place a $10-million, clean-energy investment initiative to accelerate the adoption of more sustainable Bitcoin mining practices, and promised to reinvest any gains from its investment back into the initiative.
"We believe that cryptocurrency will eventually be powered completely by clean power, eliminating its carbon footprint and driving adoption of renewables globally," said Dorsey.
That can’t come too soon, given the increasing clamor over Bitcoin’s carbon footprint.