- Square, creator of Cash App, has announced that it has purchases $50 million worth of Bitcoin
- The company follows in the footsteps of MicroStrategy in hedging some of its assets
- Pressure on the dollar is forcing companies to look further afield to help protect the value of their holdings
Square has announced that it has purchased $50 million worth of Bitcoin, stating that the cryptocurrency is an “instrument of economic empowerment”. The huge purchase comes just weeks after MicroStrategy announced a $400 million Bitcoin purchase of their own and reiterates the fact that it is no longer retail speculators who are getting aboard the Bitcoin train.
Square Puts its Money Where its Mouth Is
Square, whose founder and CEO Jack Dorsey is a noted Bitcoin supporter, made the announcement on Twitter on Thursday, explaining their rationale for the purchase:
Today, @Square announced that it has purchased $50M in bitcoin. Square believes cryptocurrency is an instrument of economic empowerment and provides a way to participate in a global monetary system, which aligns with the company’s purpose. For more, visit https://t.co/HPhSMfVgac.
— Square IR (@SquareIR) October 8, 2020
After spending years working to improve the Bitcoin experience, it is no surprise to see Square diversifying some of its assets into the cryptocurrency – indeed, you could even view it as Square putting its money where its mouth is.
Square’s announcement comes in the wake of that made by MicroStrategy, the $1.2 billion-valued software firm whose CEO Michael Saylor announced in August that it had converted some $400 million of its assets into Bitcoin.
Is The Herd Coming?
The Square announcement isn’t as much of a surprise as the MicroStrategy buy in, given that Square has previously invested in the infrastructure and operations of Bitcoin, although the purchase represents the company’s first financial investment in the cryptocurrency.
With the U.S. Dollar Index struggling to recover from its 2007 low and the ever-increasing threat on the global dominance of the dollar from the likes of China and its digital yuan, these companies have taken steps to mitigate potential further devaluation of the dollar.
With Bitcoin’s reputation having been almost transformed since 2017, you can almost guarantee that Square and MicroStrategy will not be the last companies who at least consider the cryptocurrency as a hedge.