Square, Inc., a California-based financial service and mobile payment company that makes software and hardware payments products has announced to purchase 3,318 Bitcoins for around $170 million. This is the second major investment of the company in the world’s most speculative digital asset. Previously the company bought $50 million worth of Bitcoin in October 2020 to enhance its crypto reserves. With this investment, the company’s total Bitcoin holdings stand at approximately 5% of its cash and cash equivalents reserves as contrary to 1% when it made the first investment in Bitcoin in October 2020.
In a recent press release, Square wrote that its recent investment in Bitcoin is a part of its ongoing commitment to the cryptocurrency because it believes that Bitcoin is an “instrument of economic empowerment.” The company also believes that cryptocurrency can help individuals to take part in a global monetary system and secure their financial future. Meanwhile, the company also plans to assess its aggregate Bitcoin investments and compare them to other relative investments as an ongoing process.
This is not the first time that any leading company is making such a huge investment in Bitcoin. Business intelligence company MicroStrategy was the first publicly-traded company to invest in Bitcoin last year. It was followed by Tesla that invested around $1.5 billion in Bitcoins that represented 8% of its cash equivalents. Tesla’s investment was followed by many other leading companies that added Bitcoin to its cash reserves.
After Tesla’s investments, Bitcoin surged past $58,000 and hit an all-time high price just before it collapsed to about $48,000. It was this time when Square announced to buy 3318 Bitcoins. Following Square’s announcement, the price again began to rise as usual. According to Square, the recent investment in Bitcoin would indicate an average price of around $51,235 per Bitcoin (BTC-USD).
Post this investment, Square’s Bitcoin revenue reached $1.76bn. However, it was less than expected $1.87bn, which may be because of the pandemic. Despite that, the company dramatically increased Bitcoin adoption to $177.6 million. The main focus of the company is to make Bitcoins easily accessible for its Cash App customers, and seeing the rate of Bitcoin adoption, it is pretty much sure that the company has succeeded in its mission. In 2020, more than 3 million customers bought or sold Bitcoin via Cash App, and then again in January 2021, more than 1 million new customers purchased Bitcoin via Cash App. Furthermore, in the 4th quarter of 2020, Bitcoin volumes per customer rose more than 2.5x in terms of buying activity; existing customers continued purchasing Bitcoin, and new adopters bought even more.