Square Inc. (NYSE: SQ), the San Fransisco-based payments company revealed on Tuesday that it had purchased a further 3,318 bitcoins worth $170 million.
Detailed in Square’s fourth-quarter earnings report for 2020, the company founded in 2009 by Twitter co-founder Jack Dorsey and still 24.4% owned by Jack Dorsey, the bitcoin purchase follows on from a previous bitcoin purchase worth $50 million. Combined, this represents approximately five percent of Square’s total cash, cash equivalents, and marketable securities as of December 31, 2020.
The fourth quarter bitcoin purchases suggest that Square Inc. (NYSE: SQ) paid approximately $51,000 per bitcoin. However, since then, the price of Bitcoin has seen a heavy downturn, falling 16% to below $47,000 before rallying to its current price at the time of writing of $48,130.
The payments giant saw revenue in the final quarter of 2020 more than double to $3.16 billion. Q4’s figures were up from the $1.31 billion recorded a year earlier and surpassed market expectations for revenue of $3.10 billion.
The Q4 revenue for Square Inc. (NYSE: SQ) included $987 million from its seller business and $2.17 billion from the Cash App. The Cash App enables users to send peer-to-peer payments as well as trade equities and bitcoin.
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Square Inc. (NYSE: SQ) revealed that more than 4 million customers purchased or sold bitcoin on the Cash App in 2020. The company told shareholders in a letter that:
“Bitcoin revenue and gross profit benefited from an increase in bitcoin actives and growth in customer demand, as well as a significant year-over-year increase in the market price of bitcoin,”
The latest Bitcoin move by Square follows on from the heightened interest in bitcoin by institutional investors. Earlier this month, Elon Musk’s Tesla’s latest filing with the Securities and Exchange Commission (SEC) revealed that Tesla purchased $1.5 billion worth of Bitcoin.
Square Inc co-founder Jack Dorsey is one of bitcoin’s foremost proponents who has repeatedly shared his enthusiasm for cryptocurrencies, saying it provides an “opportunity to get more people access to the financial system.”