Square announces $170 million purchase in Bitcoin, now holds 5% of its total cash reserves in BTC

Square recently announced that it has bought approximately 3,318 bitcoins at an aggregate purchase price of $170 million. 

Combined with Square’s previous purchase of $50 million in bitcoin, this represents approximately 5% of Square’s total cash, cash equivalents and marketable securities as of December 31, 2020.

“Aligned with the company’s purpose, Square believes that cryptocurrency is an instrument of economic empowerment, providing a way for individuals to participate in a global monetary system and secure their own financial future. The investment is part of Square’s ongoing commitment to bitcoin, and the company plans to assess its aggregate investment in bitcoin relative to its other investments on an ongoing basis.” the company said in a statement

“Furthermore, in the fourth quarter of 2020, bitcoin volumes per customer were up more than 2.5x year over year, primarily driven by buying activity,” Square said.

Amrita Ahuja, CFO of Square said that the company’s Cash App saw a surge in first-time bitcoin buyers in January 2021. “We had 3 million people transact in bitcoin through Cash App in 2020 and 1 million who were new to bitcoin in January [2021],” Ahuja said.

“Overall, the investment we made so far is 5% of our cash, and the business we have related to bitcoin through Cash App is about 5% of our gross profit. We’re going to evaluate this investment on an ongoing basis. We’ll be dynamic. We’ll respond to the market environment, but ultimately that long-term vision is what we’re investing into.”

The NYSE-listed company saw a significant growth in bitcoin revenue. 

As for the fourth quarter, “Cash App generated $1.76 billion of bitcoin revenue and $41 million of bitcoin gross profit … up approximately 10x and 13x year over year, respectively.”

Written by Sophie Blake

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