[ad_1]
Omar Marques | LightRocket | Getty Images
Payment company Square is buying a large block of bitcoin, an unusual use of corporate cash.
Square said Thursday that it bought 4,709 bitcoins, worth around $ 50 million. This represents about 1% of Square’s total assets at the end of the second quarter of 2020.
“Square believes cryptocurrency is an economic empowerment tool and provides a way for the world to participate in a global monetary system, which is in line with the company’s purpose,” the company said in a statement.
The price of the digital currency jumped to around $ 10,724 from $ 7,100 in January, according to industry site CoinDesk, in a year full of coronavirus pandemics. The digital currency dropped below $ 5,000 during the March recession.
“We believe bitcoin has the potential to be a more ubiquitous currency in the future,” Square Chief Financial Officer Amrita Ahuja said in a statement. “As it grows in adoption, we intend to learn and participate in a disciplined way. For a company that is building products based on a more inclusive future, this investment is a step on that journey.”
Square founder and CEO Jack Dorsey is a supporter of the digital currency, stating that in 2018 the cryptocurrency will eventually become the “single currency” of the world. However, the Twitter founder said it could take a decade.
Using it or another cryptocurrency as a global currency would lower the barrier for Dorsey’s payments company to enter new markets, he said in 2018.
Bitcoin has been characterized by volatility over its 11 years of existence. This and its high transaction costs have largely prevented it from being used as a daily payment method. Instead, it is seen by some advocates as a store of value, or “digital gold”. That use case of global coverage seemed unlikely in 2018 after the year ended with a decline of more than 73%; however, some attribute its rise in 2019 and 2020 to coverage against the then US trade war with China and now the coronavirus pandemic.
Square has allowed its customers to buy bitcoins on its Cash app since 2018.
Outspoken tech investor Chamath Palihapitiya told CNBC Tuesday that Social Capital uses bitcoin as a 1% hedge in its portfolio.
“This is a tool we use as a cover,” Palihapitiya said. “I don’t think this is something you trade and the more people are obsessed and focus, at least in my opinion, on what the price action is, the more it will confuse you, the more it will frustrate you. to never need it, “he added.
Subscribe to CNBC PRO for exclusive insights and analysis and live scheduling of the working day from around the world.
.[ad_2]Source link
