Jack Dorsey-backed Square Inc Puts $50 Million in Bitcoin, Big Institutions Join the Race

With economic uncertainty around the corner, big financial institutions have set their eyes on the world’s largest cryptocurrency, Bitcoin. On Thursday, October 8, Square Inc, the financial services company backed by Twitter CEO Jack Dorsey announced its purchase of 4,709 bitcoins (BTC) for an aggregate value of $50 million.

Square said that the investment is just 1% of its total assets and the decision “align’s with the company’s purpose”. Besides, the press release added that cryptocurrency is an instrument of economic empowerment and offers a way to participate in the global monetary system.

Square’s Chief Financial Officer, Amrita Ahuja said: “We believe that bitcoin has the potential to be a more ubiquitous currency in the future. As it grows in adoption, we intend to learn and participate in a disciplined way. For a company that is building products based on a more inclusive future, this investment is a step on that journey.”

Square CEO Jack Dorsey has been an ardent supporter of Bitcoin in the past and also called it as the single currency of the world. Dorsey also owns some undisclosed amount of Bitcoins himself. He noted: “Bitcoin, for us, is not stopping at buying and selling. We do believe that this is a transformational technology for our industry and we want to learn as quickly as possible.”

Besides, Square also launched its now popular Cash App back in 2018 allowing users to quickly buy and sell Bitcoins. Last year in 2019, the company also floated its crypto subsidiary Square Crypto to bring more contributions to the Bitcoin open-source work.

In Q2 2020, Square announced that its Cash App Bitcoin revenue jumped 600% and profits jumped by 700%. The whitepaper released by Square Inc titled “Square, Inc. Bitcoin Investment Whitepaper” reveals the exact info about the methods that the company adopted for Bitcoin investment and also what other companies can follow the route.

The Whitepaper talks about the execution of such a large quantity of Bitcoins, details about securing the purchase, as well as the open-source documentation and code to accomplish the safe storage.

Along with Square, a number of big institutions have shown interest in Bitcoin and it continues to grow even further. Recently, the Nasdaq-listed business intelligence firm MicroStrategy invested a massive $425 million in Bitcoin from its cash reserves. The company purchased a total of 38,250 BTCs over the last six months.

In one of his recent tweets, MicroStrategy CEO Michael Saylor writes: “I considered investing our treasury in fiat, bonds, stocks, swaps, index funds, options, real estate, commodities, precious metals, art, & intangibles before settling on #Bitcoin. It seems like the ideal long duration asset – I don’t understand why anyone would want to trade it”.

At press time, Bitcoin is trading at a price of $10,854 with a market cap of just over $200 billion. This is also the longest period that the BTC price has consistently stayed