Jack Dorsey’s Square Invests USD 50m in Bitcoin

US-based payments company Square, founded and led by well-known Bitcoin bull, Twitter CEO Jack Dorsey, said it acquired BTC 4,709 at an aggregate purchase price of USD 50m on October 7.

“Given the rapid evolution of cryptocurrency and unprecedented uncertainty from a macroeconomic and currency regime perspective, we believe now is the right time for us to expand our largely USD-denominated balance sheet and make a meaningful investment in bitcoin,” the company said.

Square added that their treasury purchased the BTC over-the-counter “with a bitcoin liquidity provider that we currently use as part of Cash App’s bitcoin trading product.”

“We negotiated a spread on top of a public bitcoin index and executed trades using a Time-Weighted Average Price (TWAP) over a predetermined 24-hour period with low expected price volatility and high market liquidity, in order to reduce risks associated with cost and pricing,” they said.

Also, the company added that although this investment is held in cold storage, in order to further protect their BTC holdings Square maintains a Crime insurance policy to protect against internal or external theft of BTC both in hot wallet and cold storage.

At pixel time (13:43 UTC), BTC trades at USD 10,748 and is up by 1% in a day, trimming its weekly losses to less than 1.5%.

Also, as reported, the company operates Square Crypto, an independent team focused on contributing to BTC open source work “for the benefit of all.” The company also recently launched the Cryptocurrency Open Patent Alliance (COPA), a non-profit organization encouraging crypto innovation, opening access to patented crypto inventions, and helping companies and individuals defend themselves against patent aggressors.

Square reported USD 875m in BTC revenue made via its Cash App service during the second quarter of 2020, up 600% year over year. Cash App generated USD 17m in bitcoin gross profit in that period, which is up 711% year over year. Bitcoin revenue and gross profit benefited from an increase in bitcoin actives and growth in customer demand, the company said.
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