Victor Ugochukwu · Dec 14, 2020 . 5min read
Square goes bullish on Bitcoin, makes a $50M investment in the foremost cryptocurrency
The payment company which developed Cash App announced that it bought 4,709 bitcoins valued at $50M.
By Victor Ugochukwu · Oct 9, 2020 . 6min read
Jack Dorsey led Square has announced a recent $50M investment in Bitcoin. The payment company which developed Cash App for retail investors to buy and sell bitcoin easily announced it bought 4,709 bitcoins valued at $50M now representing 1% of its investment portfolio.
Square’s latest move comes off as a strong supporter of the “internet magic money” and more importantly, the digital Gold which has been proving to be a credible store of value in terms of appreciation.
The tech company in its radical method like Bitcoin open-sourced the decision behind the purchase, and it said
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.
Amrita Ahuja, CFO of Square spoke on the company’s unwavering belief about Bitcoin as the currency of the future. She said,
“We believe that bitcoin has the potential to be a more ubiquitous currency in the future… For a company that is building products based on a more inclusive future, this investment is a step on that journey.”
Square makes the Microstrategy move in its investment in Bitcoin.
Although Square’s recent investment in Bitcoin equates to just a tenth of Microstrategy’s recent bold investment in the asset, it is still a bold bet for the tech payment company. Just a couple of weeks back, Microstrategy invested $425 million in Bitcoin representing a third of its portfolio. Yes, critics point out that Microstrategy has been on a downward spiral before the investment. However, the publicly traded firm’s decision comes off as strategic. It could even become what determines its survival as well as a competitive edge in the coming years.
Moreso, Square’s decision to make a $50M investment in Bitcoin isn’t so surprising, especially as Jack Dorsey is the CEO. Jack is a strong supporter of Bitcoin, which he described as the internet’s native currency.
In summary, Square looks like it’s in it for the long ride. And clearly, it is not shying away from tapping into the digital asset that has achieved network effect. Jack in responding to Coinbase’s apolitical stance said
“Bitcoin (aka ‘crypto’) is direct activism against an unverifiable and exclusionary financial system which negatively affects so much of our society,”
The institutional foray into Bitcoin and digital assets are not so new. But giant tech companies begin to pitch their tent with cryptocurrencies; it may eventually spark of a herd effect. Others might not want to left out with the negative interest rate and plummeting of the risk-free rate of return.
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