Square bought additional bitcoins (BTC) worth $ 170 million after generating massive BTC revenues in 2020
Payment giants Square announced yesterday that they had purchased $ 170 million worth of bitcoins. The company acquired 3,318 BTC as reserve assets, adding that to the previous supply it bought in October.
The press release states: “Square has purchased approximately 3,318 bitcoins for a total purchase price of $ 170 million. When combined with Square’s previous purchase of $ 50 million in Bitcoin, that represents approximately five percent of Square’s total cash, cash equivalents, and marketable securities as of December 31, 2020”.
Square has actively invested in cryptocurrencies. She believes that cryptocurrencies are instruments of economic empowerment that pave the way for people to participate in a global monetary system and secure their financial future.
This latest development comes after a CoinDesk report revealed that Square’s previous $ 50 million investment in Bitcoin is now worth over $ 250 million. The company bought 4,709 bitcoins at a cost of $ 50 million in October 2020. However, the value rose as the price of Bitcoin rose from $ 13,000 in October to over $ 50,000 today.
Square’s earnings report, filed with the Securities and Exchange Commission, showed that the company generated $ 4.57 billion in Bitcoin revenue last year. Of the $ 4.57 billion in revenue generated from BTC-related activities, $ 97 million was gross profit. The company saw a massive year-over-year increase in Bitcoin sales (785%).
The San Francisco-based payment giant said that revenue from the sale of BTC through its Cash app accounted for 8% of total consolidated sales and 85% of the total increase in consolidated net sales last year.
The company generated most of its sales and profits in the fourth quarter of 2020. Square had BTC sales of $ 1.76 billion and gross profit of $ 41 million in the fourth quarter. The massive spike in revenue and gross profit in the fourth quarter was due to the price of Bitcoin climbing to a new all-time high towards the end of the year.
Jack Dorsey, CEO of Square, told investors: “We will focus on increasing the transaction limits for the Cash app across the system, doubling our exposure to Bitcoin, and looking for new ways to connect our products within the Cash app.”
Square was one of the first companies to invest in Bitcoin alongside MicroStrategy. The company invested its reserve funds in the cryptocurrency, and several large companies like Tesla are taking similar steps.