Square makes Bitcoin (BTC) fit for the masses
Crypto for all: Square makes Bitcoin (BTC) fit for the masses
Bitcoin has what it takes to become the global reserve currency in the long term, Square founder and CEO Jack Dorsey said back in 2018. His payment service provider Square is now apparently setting the course for this scenario and recently bought Bitcoins on a large scale in a rather surprising move. Why increasingly large companies are eyeing the young crypto market.
In the crisis year 2020, the world of digital currencies is consolidating. Not least PayPal’s new crypto service is the latest example of how entry into the crypto world is being made suitable for the masses. There is an upheaval in the market. Competitors such as Robinhood Markets or Square, Inc. have also been offering trading in Bitcoin and Co. for some time. The latter is the second company of Twitter co-founder Jack Dorsey, who founded the mobile payment service in 2009 after being temporarily forced out of Twitter. He is the largest shareholder with a 24.4 per cent stake. The San Francisco-based Bitcoin Era company sells readers for smartphones and tablets that allow merchants to accept card payments on the mobile devices. Now Square has bought about 4,709 Bitcoins with a total value of about 50 million US dollars, the company said in a statement. With this, the payment intermediary is taking a pioneering role in Bitcoin after the company MicroStrategy.
The Bitcoin growth market: a clever move
The company justified the move by saying that it believes in bitcoin’s potential to grow further in the future: „Given the rapid evolution of cryptocurrencies and the unprecedented uncertainty of macroeconomic and monetary conditions, we believe it is the right time for us to expand our largely US dollar balance sheet and make a significant bitcoin investment,“ the statement reads. 50 million US dollar investment is definitely not a small volume for the payment service provider. Not even if Square now has a turnover of 5.8 billion US dollars. The value would even correspond to around 1 per cent of Square’s total assets at the end of the second quarter. But Square „believes that bitcoin has the potential to be an omnipresent currency in the future,“ said Square CFO Amrita Ahuja. Square wants to participate significantly in the growing acceptance of the digital currency and learn from it.
Moreover, Square sees Bitcoin as a „tool to strengthen economic independence“ that enables people around the world to participate in a global monetary system. This is in line with the purpose Square wants to fulfil as a company.
Square is a very innovative company overall and Bitcoin is part of a new infrastructure that is a clear growth market. That Square is now investing in Bitcoin itself may have further, more speculative reasons. Nevertheless, the general acceptance for fringe and other currencies is a possibly valuable step towards further growth. Ultimately, Square can profit from every transaction that is processed. Accordingly, it makes sense to focus on young markets that can potentially have a lot of further growth potential. As the current reserve currency among cryptocurrencies, Bitcoin has great potential in terms of transaction volume. This can have a positive impact on Square’s operating business.
However, cryptocurrencies are not the only area Square is open to. For example, the company also supports the cannabis industry, which could also result in gigantic growth in transaction volume. So betting on young, high-growth markets could be a smart move overall.
Squares Cash app enables bitcoin purchases
For self-confessed crypto fan Jack Dorsey and his company, this is far from the first foray into the world of digital currencies. Via the peer-to-peer app „Cash“, users in the US can already buy, hold and sell Bitcoins in 2018. In addition, Square has been supporting the cryptocurrency space since 2019 with an independent team of open-source projects to further develop the Bitcoin network. Just in September, the payment intermediary also announced the founding of the Crypto Open Patent Alliance (COPA), a non-profit consortium to protect the open source nature of cryptocurrencies, which bundles the patents of individual members and makes them available to them in a crypto database.