Twitter boss buys $50 million worth of Bitcoin with Square
Twitter’s boss Jack Dorsey believes in Bitcoin and has just invested $50 million in digital tokens on October 8th. The deal was not personal, but with Square, his other career project; a fintech company already valued at $80 billion. Over the last seven months, it has been at the forefront of the acceleration of dematerialized payments, a market in which it has positioned itself very well.
In a press release, Square announced that it had purchased 4,709 Bitcoins. Its transaction gave it second place in the ranking of bitcoin investments by U.S. financial companies.
The company invested $50 million, a score that is already colossal, even though it falls short of MicroStrategy’s $400 million invested last month. In addition to the entrepreneur’s love affair with cryptocurrencies, the stakes will be high for the future, especially in the face of PayPal.
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Payment terminal Square
Square continues to make its mark in the payment business. Whether for consumers or merchants, Square provides solutions.
“Given the rapid evolution of the crypto sector and the unprecedented uncertainty in the macroeconomy and monetary regime, we believe the time has come for us to expand our cash flow, which is largely in dollars, and make a significant investment in Bitcoin,” Square said in a letter shared by his boss Jack Dorsey on Twitter.
Leading by example
Square shines in particular in its payment activity with its Cash App application. As a Bitcoin supporter, Jack Dorsey has of course introduced the purchase and use of Bitcoins via the app, and the entire Square product network (even the payment terminals) accept payment via these digital tokens. An availability that is not found in banks.
In 2018, as reported by The Verge, Square explained its interest by stating: “Bitcoin, for us, doesn’t stop at buying and selling. We believe it is a transformative technology for our industry and we want to learn as quickly as possible.”
But of course, as a company that aims to compete with PayPal and the banking world in general, Square has an economic interest in it. In the first quarter of 2020, $306 million of its $1.38 billion in revenues came from its Bitcoin business. The details are not accessible, Square had only filled in one line “Bitcoin revenues” in the document published on the website of the SEC, the regulator of American banks and financial companies.
The growth of the Fintech company was confirmed the following quarter. In the midst of a deplorable health crisis for consumers, Square announced a revenue of around $875 million, up 600% over one year.
Square wants to bypass PayPal
Its main competitor PayPal, which benefits from the first position in the ranking of the financial companies of payment, could be taken by Square by surprise. The strategy of Jack Dorsey’s box could pass in front of Elon Musk’s PayPal. Rightly or wrongly, Square has started working on cryptocurrency much faster than PayPal, which is still studying its interest and launch possibilities.
To date, Square reported having a special team called Square Crypto, which is working on tools and technologies to make Bitcoin a currency “for the benefit of all”. Anyone who takes advantage of its decentralization, transparency and belonging to no entity is making Square drool. In addition to its work on technologies and compatibility on its applications and payment terminals, Square also intends to put its name in the circle of the Bitcoin community.
To this end, it launched Cryptocurrency Open Patent Alliance (COPA), a non-profit organization, on September 11th. The aim is to bring together all the players in a consortium that is supposed to fight against patent trolling and guarantee access to the technology. A democratization that brings people together and controls. In one month, its price on the NYSE went from $145 to $184.
(Featured image by Clay Banks via Unsplash)
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