Square Buys $170 Million worth of Bitcoin

Square(SQ) revealed in its fourth-quarter earnings report on Tuesday that it has purchased $170 million worth of bitcoin.

The company purchased about 3,318 bitcoins, adding to its October 2020 purchase of 4,709. It said the October bitcoin purchase accounts for nearly 5% of the company’s total assets in 2020.

After market close on Tuesday, bitcoin traded nearly $48,000, up almost 62% for the year.

“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,” said Square CEO Jack Dorsey.

With companies like Square and Tesla taking the lead to invest in bitcoin, other companies observing from afar how profitable Bitcoin investment could be. Tesla announced earlier this month that it purchased $1.5 billion worth of bitcoin to boost “flexibility to further diversify and maximize returns” on the company’s cash.

In a press release before its earnings call, Square said that cryptocurrency investing is “aligned” with the company’s purpose. Square considers cryptocurrency as “an instrument of economic empowerment, providing a way for individuals to participate in global monetary system and secure their own financial future.”  

Investing in the digital currency comes with huge risks due to its volatility, but if companies play their cards well, they may likely make huge profits from Bitcoin.

Business intelligence software company MicroStrategy became the first publicly-listed company to add bitcoin to its balance sheet in 2020. The CEO of the software company, Michael Saylor said other companies would likely follow the steps of Square and Tesla to purchase bitcoin and add it to its cash holdings.