Square Inc and Jack Dorsey Buy Up $50m Worth of Bitcoin
Payments Company Square Inc. has invested $50m of its treasury into Bitcoin, as it looks to build for the future.
The investment is approximately one percent of Square’s total assets, as of the end of the second quarter of 2020, and saw them buy approximately 4,709 bitcoins.
Founded by CEO Jack Dorsey, the US-based payments firm reasoned that Bitcoin had the potential to become a more ‘ubiquitous currency’ in the future.
The news came from a ‘whitepaper’ announcement yesterday, and the market reacted positively as the stock price rose 1.84%.
CEO Jack Dorsey shared the statement on his Twitter feed. Titled Square, Inc. Bitcoin Investment Whitepaper, the NYSE listed firm stress the reasoning for shifting part of their treasury into Bitcoin is down to the uncertainty of the economy.
‘Given the rapid evolution of cryptocurrency and unprecedented uncertainty from a macroeconomic and currency regime perspective, we believe now is the right time for us to expand our largely USD-denominated balance sheet and make a meaningful investment in bitcoin.’
The San Francisco based payments firm is well known for its bullish stance on Bitcoin. Back in 2018 it launched Cash App, a Bitcoin trading app which enables users to buy and sell Bitcoin among other financial services.
And from the whitepaper announcement, it’s clear that it sees Bitcoin as a tool for inclusivity and empowerment for everyone.
‘We view bitcoin as an instrument of global economic empowerment,’ say Square. ‘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.’
Square Inc. is a San Francisco based financial services, merchant services aggregator, and mobile payment company.
The company was founded in 2009 by Jack Dorsey and Jim McKelvey and launched its first app and service in 2010.
The company went public in 2015 and is traded on the NYSE, with the ticker symbol SQ. Since launching the price of the stock has performed fantastically well.
Starting at around $12.50 in November 2015 the price has risen meteorically, with much of the growth coming in the last 12 months.
YTD SQ is up 198%, but since the March 2020 lows after the lockdown crash, the stock is up over 400%, trading at $183.50 at close.
Square’s biggest product, Cash App launched in 2015, and the payments app integrated Bitcoin in 2018. Users can now buy Bitcoin, sell it, and trade all within the app, or using the app’s debit card.
In 2019, the company formed Square Crypto, an independent team that focuses on contributing to Bitcoin open-source work.
And earlier this year Square launched the Cryptocurrency Open Patent Alliance (COPA), a non-profit organization, which is looking to encourage crypto innovation and open access to patented crypto inventions.
Both of these were highlighted by Jack Dorsey as being much more important than the $50m purchase of Bitcoin, as Jack looks to build his empire around the Bitcoin infrastructure.
‘Far more important than [Square investing $50m in Bitcoin] is investing directly in open source development with Square Crypto, opening access to patents with COPA, and making Bitcoin more accessible and useful to millions of people with Cash App.’
Jack Dorsey and Square Get Bitcoin
Every Bitcoiner knows how bullish Jack Dorsey is on Bitcoin, and Square’s foray into the leading cryptocurrency might not be a shock to everyone, but again it’s the size of the purchase.
Sure, it’s not as much as MicroStrategy’s $425m, but Dorsey is a Bitcoiner. He’s also a Silicon Valley OG, and he’s got tens of billions of dollars in a giant melting ice cube at both Square and Twitter.
This $50m is significant as it’s public money, and it’s just the tip of the iceberg for Jack Dorsey.
Let’s hope he’s savvy enough to realize that iceberg will quickly melt if he doesn’t act. I wouldn’t bet against Jack.