Payment company Square Inc (NYSE:SQ) has invested an additional $170 million in Bitcoin (BTC). Square and Twitter CEO Jack Dorsey confirmed on Tuesday (February 23, 2021) that it was time to “double down” on the firm’s commitment to the world’s largest digital currency (in terms of both market cap and adoption).
Dorsey stated that the Internet “needs a native currency,” and that his company thinks “Bitcoin is it.”
Square reportedly acquired 3,318 bitcoins during Q4 2020. The payment firm’s move appears to have helped with the mainstream acceptance of the cryptocurrency, which has been gaining a lot of support from large institutions globally.
Dorsey noted during a post-earnings conference call that “by us owning Bitcoin, our incentives are aligned with skin in the game.”
Square has been quite actively involved with Bitcoin-focused initiatives for several years and its Cash App, a widely-used digital payments service, has been allowing users to trade Bitcoin since 2018.
The Cash App reportedly had around 3 million active Bitcoin users last year, with around a million new customers purchasing the digital asset for the first time in January 2020, the firm revealed.
As covered, Square acquired 4,709 bitcoins for $50 million back in October 2020. Since that time, the crypto’s price has set many new all-time highs (recently surpassing the $58,000 mark but now correcting to about $50,000 at the time of writing). Other large firms such as Elon Musk’s Tesla Inc recently invested $1.5 billion in Bitcoin and Bank of NY Mellon Corp has stated that it will be establishing a division for assisting its customers with dealing in crypto-assets.
In its most recent BTC purchase, Square has paid over $51,200 per Bitcoin. But the BTC spot price had crashed over 13% (on Tuesday) to briefly below $47,000 amid a larger crypto market selloff.
Square company shares fell around 5% after the bell on Tuesday, which extended overall losses for the Fintech firm.
Square’s revenue in the quarter has more than doubled (appr. $3.16 billion), which the firm claims was boosted by its Bitcoin purchases via its Cash App.
Square’s gross profit on BTC trading increased 13 times during Q4 2020, however, it was still only 2% of its total revenue from the digital currency. Square’s BTC holdings are valued at around 5% of its estimated $4.4 billion cash reserves.
The payments firm has posted adjusted earnings of 32 cents per share, which is significantly better than the project 24 cents.