Square has bought more Bitcoin and added the $ 170 million worth of cryptocurrency to its balance sheet. The company now holds 5% of its cash reserves in bitcoin. The Cash App was used by more than three million customers to buy or sell the cryptocurrency last year.
Purchase of Bitcoin worth $ 170 million
Square Inc. (NYSE: SQ) announced its fourth quarter and full year 2020 results Tuesday. The company also announced that it had purchased $ 170 million worth of Bitcoin “as part of its ongoing commitment to cryptocurrency.” This is the company’s second Bitcoin purchase. The first was for $ 50 million made last October. According to the announcement:
It bought approximately 3,318 bitcoins for a total purchase price of $ 170 million. When combined with Square’s previous purchase of $ 50 million in Bitcoin, that represents approximately five percent of Square’s total cash, cash equivalents, and marketable securities as of December 31, 2020.
“Square believes that cryptocurrency is a tool of economic empowerment and enables individuals to participate in a global monetary system and secure their own financial future,” the company stated. “The investment is part of Square’s ongoing commitment to Bitcoin. The company plans to continuously evaluate its overall Bitcoin investment versus its other investments.”
Increased Bitcoin acceptance via Cash App
The NYSE-listed company, led by CEO Jack Dorsey, who also runs Twitter Inc., is seeing an increasing adoption of Bitcoin. The Cash app enables people to buy and sell BTC. According to Square’s earnings report released Tuesday:
In 2020, more than three million customers bought or sold Bitcoin using the Cash app, and in January 2021, more than one million customers bought Bitcoin for the first time.
“Additionally, bitcoin volume per customer increased more than 2.5x year over year in Q4 2020, largely due to buying activity,” continued Square.
Additionally, the company announced that “there was significant year-over-year growth in Bitcoin sales throughout 2020.” Square noted that “Bitcoin revenue is the total amount of bitcoin sold to customers,” wrote Square:
For the full year 2020, Cash App had Bitcoin sales of $ 4.57 billion and gross profit of $ 97 million, up 9 times and 12 times respectively over the previous year.
For the fourth quarter, Cash App had Bitcoin sales of $ 1.76 billion and gross profit of $ 41 million. This corresponds to an increase of around 10 or 13 times compared to the previous year.
What do you think of Square holding 5% of its cash reserves in Bitcoin? Let us know in the comments below.
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