Square Buys More Bitcoin Worth $170 Million

Jafrin  |  Feb 24, 2021

Jack Dorsey's payments company Square has announced purchasing approximately 3,318 bitcoin worth $170 million. As revealed in Square’s fourth-quarter earnings report for 2020, the recent bitcoin purchase follows on from a previous bitcoin purchase worth $50 million. Combined with the new purchase, the payments company now brings its total bitcoin holdings to approximately 5% of its cash and cash equivalents.

Square Saw 3 Million Active Bitcoin Customers in 2020

Square’s recent Bitcoin purchase of 3,318 bitcoins units would indicate an average price of about $51,235 per bitcoin. At the time, the purchase amounted to about 1% of the company’s cash and cash equivalents. Square initially announced a bitcoin investment in October 2020, when it purchased $50 million worth BTC when the price of the cryptocurrency was worth over $10,000 at the time.

In its 2020, fourth-quarter announcement release, the firm stated:

“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 payment app had three million active bitcoin customers in 2020, with a million new users buying the currency for the first time in January.

Square's Final Quarter of 2020 More Than Doubled Since BTC Purchase

The latest Bitcoin move by Square follows on from the increased interest in bitcoin by institutional investors. Earlier this month, Elon Musk’s Tesla’s latest filing with the Securities and Exchange Commission (SEC) indicated that Tesla purchased $1.5 billion worth of Bitcoin.

Square saw its revenue in the final quarter of 2020 more than double to $3.16 billion. The Q4’s figures were up from the $1.31 billion recorded a year earlier and surpassed market expectations for revenue of $3.10 billion. The fourth quarter bitcoin purchases suggest that Square paid approximately $51,000 per bitcoin. Since then, the price of Bitcoin fell approx 16% to below $47,000 before rallying to its current price near $48,000 at the time.

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