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

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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.

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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.

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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.”

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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.

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