Good news, everyone! – While the cryptomoney market was rather amorphous these last few days, a big bullish news has just fallen. After MicroStrategy last month, it’s now Square who proudly announces having invested heavily in Bitcoin.
Nearly 5,000 BTC bought in cash
Founded by Jack Dorsey (also the creator of Twitter), Square aims to simplify electronic payments.
In a press release issued on October 8, Square announced that it had purchased approximately 4,709 Bitcoins, for a total purchase price of $50 million.
This investment in the King of Cryptos represents approximately 1% of Square’s total assets at the end of the second quarter of 2020.
Since 2018, Square had already been offering its customers the opportunity to purchase Bitcoins through its Cash App, but this is the first time the company has purchased Bitcoins for its own financial investment.
„We believe Bitcoin has the potential to become a more ubiquitous currency in the future. As Bitcoin is adopted, we intend (…) to participate in it in an organised way. As a company that builds products based on a more inclusive future [financially], this investment is a step towards that goal. „Amrita Ahuja, Square’s Chief Financial Officer.
A white paper on Bitcoin investment
Rarely has Square released a whitepaper explaining in detail its investment strategy in the Crypto Trader invented by Satoshi Nakamoto. Jack Dorsey’s company explains that it wants to protect itself from future economic risks by reducing its positions in US dollars:
„Given the rapid evolution of the cryptomoney industry, and the unprecedented macroeconomic and monetary policy uncertainty, we believe that the time has come for us to diversify our balance sheet, which is too largely denominated in dollars, and to invest significantly in Bitcoins. »
In order to avoid an explosion of BTC prices during this important purchase, Square explains in its investment white paper that it bought its bitcoins „over-the-counter“ (OTC).
The purchase of Square’s 4,709 BTCs was thus executed gradually over a 24-hour period.
Square concludes its investment whitepaper with the following statement:
„We hope that this explanation of our decision to allocate part of Square’s assets to bitcoins will provide useful information to others considering a similar strategy. »
A very promising conclusion, admittedly, since it implies that other big companies are seriously considering doing the same as MicroStrategy and Square. While greenbacks are becoming less and less popular as a reserve currency, Bitcoin is gaining its first stripes in this respect. But let’s end on a lighter note: for a company like Square, a $50 million expense is not astronomical either.