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Jack Dorsey’s Square invests $50 million in Bitcoin

Photo of: Joseph Stone
by Joseph Stone

The American electronic payments company Square, co-founded and managed by the famous pro-Bitcoin Twitter CEO Jack Dorsey, has just declared that on October 7, 2020 it has acquired 4,709 Bitcoins, or $50 million.

“Given the rapid evolution of cryptocurrencies and the unprecedented uncertainty in the macroeconomy and monetary regime, we believe the time has come for us to expand our cash position, which is predominantly in dollars, and make a significant investment in Bitcoin,” the company said.

Square added that their treasury has purchased the OTC BTC “with a Bitcoin liquidity provider that we currently use through our Cash App”.

“We traded a spread on a public Bitcoin index and executed trades using a Time-Weighted Average Price (TWAP) over a predetermined 24-hour period with low price volatility and high market liquidity to reduce cost and price risk,” they said.

In addition, the company added that although this investment is cold stored (offline) to further protect its holdings in BTC, Square has a crime insurance policy to protect against internal or external theft of BTC, both in the online and offline portfolios.

At 13:43 UTC, BTC is trading at $10,748 USD and has risen 1% in one day, reducing its weekly losses to less than 1.5%.

In addition, the company operates Square Crypto, an independent team that strives to contribute to BTC’s work on open source “for the benefit of all”. The company also recently launched the Cryptocurrency Open Patent Alliance (COPA), a non-profit organization that encourages crypto innovation, opens access to patented inventions in this field and helps companies and individuals defend themselves against patent attackers.

Square reported $875 million in Bitcoin revenue from its Cash App service in the second quarter of 2020, a 600% increase over the previous year. Cash App generated USD 17 million gross margins in Bitcoin during this period, a 711% year-on-year increase. Bitcoin revenues and gross margin benefited from an increase in Bitcoin assets and growth in customer demand, the company said.