Square Puts $50 Million in Bitcoin on Crypto ‘Empowerment’ Bet

09 Oct 2020, 06:50 AM IST

(Bloomberg) -- Square Inc. said it has made an investment of about $50 million in Bitcoin, cementing Chief Executive Officer Jack Dorsey’s vision of the currency as an instrument of economic empowerment.

The financial payments company said it bought about 4,709 Bitcoins, representing about 1% of Square’s total assets as of the end of the second quarter.

Square Puts $50 Million in Bitcoin on Crypto ‘Empowerment’ Bet

“We believe that Bitcoin has the potential to be a more ubiquitous currency in the future,” Chief Financial Officer, Amrita Ahuja said in a statement Thursday. “For a company that is building products based on a more inclusive future, this investment is a step on that journey.”

Dorsey has long held an interest in cryptocurrency. In 2014, Square started letting merchants accept Bitcoin and has since introduced Bitcoin trading for users of its Cash App. In 2019, the company formed Square Crypto, an independent team focused on contributing to open-source work in Bitcoin and cryptocurrency.

Bitcoin recouped earlier losses in Thursday’s trading session, rising as much as 0.9% to trade around $10,740. Peer cryptocurrencies including Bitcoin Cash, Dash and Monero also advanced. Square shares rose 1.7% at 9:31 a.m. in New York.

Square isn’t the first public company to make a foray into the crypto space in recent weeks. MicroStrategy Inc. made a splash over the summer when it invested the lion’s share of its treasury in Bitcoin. In mid-August, the company announced it had purchased $250 million of the cryptocurrency, and in mid-September, its CEO bought an additional $175 million, telling Bloomberg News that he intended to continue buying.

“There’s no yield to be had anywhere in fixed income,” said Chris Gaffney, president of world markets at TIAA Bank. “Stocks have done well but the big surge we saw after the drop is pretty much over now and it’s certainly choppy markets. Bitcoin dropped dramatically and it’s clawing its way back -- perhaps it’s just another way for investors to speculate on future volatility.”