Square Hops on the Bitcoin Bandwagon with $170 Million Mega-Purchase

Bitcoin on motherboard,3d rendering,conceptual image.
Andy / Getty Images/iStockphoto

Square announced it made a $170 million purchase of bitcoins “as part of its ongoing commitment to the cryptocurrency,” the company said in its earnings statement yesterday.

See: Bitcoin’s Value Skyrockets to $1 Trillion as Price Hits $54,000
Find: Why Some Money Experts Believe In Bitcoin and Others Don’t

The company announced it purchased approximately 3,318 bitcoins at an aggregate purchase price of $170 million. Combined with Square’s previous purchase of $50 million of Bitcoin, this represents approximately 5% of Square’s total cash, cash equivalents and marketable securities as of December 31, 2020, according to the earnings statement.

“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,” it said in the statement. “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.”

Square posted its results for the fourth quarter and full year of 2020 yesterday. In the fourth quarter of 2020, total net revenue was $3.16 billion, up 141% year over year, and, excluding Bitcoin revenue, total net revenue was $1.40 billion, up 23% year over year, it said.

Building Wealth

See: Banks Might Treat Bitcoin Like ‘Real Money’ – These Experts Weigh the Pros and Cons
Find: Mark Cuban – “Bitcoin is Exactly like the Dot Com Bubble”

In the fourth quarter of 2020, gross profit grew 52% year over year to $804 million. For the full year of 2020, gross profit grew 45% year over year to $2.73 billion.

“Throughout 2020 we were guided by our purpose of economic empowerment. Across both ecosystems, we pivoted our product roadmaps and prioritized new investments to best help customers adapt during the pandemic,” the company said in the statement. “We also furthered our ongoing commitment to building a more inclusive and sustainable foundation for our global business, such as sharing plans to invest $100 million in minority and underserved communities, announcing our plans to be net-zero carbon for operations by 2030, and launching the Bitcoin Clean Energy Investment Initiative.”

See: Socially Responsible Investing in 2021: How Can You Invest Responsibly?
Find:  Tesla Buys $1.5 Billion in Bitcoin, Says It Will “Soon” Accept It as Form of Payment

Square joins a slew of companies having recently invested in Bitcoin, most notably Tesla, which announced it bought $1.5 billion in bitcoins earlier this month (with some infamous fallout earlier this week).

Elon Musk’s company also said it would begin accepting the cryptocurrency “as a form of payment for our products in the near future,” according to a Tesla Securities and Exchange Commission filing. Musk had also added #bitcoin to his twitter bio earlier, which had sent the currency soaring.

Building Wealth

More from GOBankingRates

About the Author

Yaël Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

Untitled design (1)
Close popup The GBR Closer icon

Sending you timely financial stories that you can bank on.

Sign up for our daily newsletter for the latest financial news and trending topics.

Loading...
Please enter an email.
Please enter a valid email address.
There was an unknown error. Please try again later.

For our full Privacy Policy, click here.