Square, the FinTech payments company headed by Twitter CEO Jack Dorsey, announced on Thursday (Oct. 8) that it has invested $50 million — approximately 1 percent of its total second-quarter assets — to purchase roughly 4,709 bitcoins.
“We believe that bitcoin has the potential to be a more ubiquitous currency in the future,” said Amrita Ahuja, chief financial officer, Square. “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 said that cryptocurrency aligns with the company’s purpose in that it empowers people worldwide to participate in a global monetary system. The company has previously invested in bitcoin “from a product, leadership and legal innovation perspective.”
The company introduced bitcoin trading in 2018 with Cash App, and the following year launched the independent Square Crypto. Square also recently rolled out the nonprofit Cryptocurrency Open Patent Alliance (COPA).
To provide more information about the process behind the execution of Square’s purchase, and to help others who are interested in bitcoin investments, the company has an open-source whitepaper.
Square was founded in 2009 in Silicon Valley and has offices in the United States, Canada, Japan, Australia, Ireland, Spain, and the U.K.
Square is the second publicly traded company to make such a bet, following a $250 million bitcoin purchase by MicroStrategy, a Virginia-based software intelligence firm. In both cases, the purchases amount to a long-term bullish bet on bitcoin.
Cash App generated $875 million of bitcoin revenue and $17 million of bitcoin gross profit during the second quarter of 2020, up 600 percent year over year. Comparatively, Square made $306 million in bitcoin revenue for Q1.
Square said the pandemic has triggered a move to card payments. Its share of cash transactions has fallen to one-third since the first of August, down from nearly 41 percent compared to the same time last year.
