Square has purchased additional bitcoins (BTC) worth $170 million after realising massive BTC revenue in 2020
Payment giants Square announced yesterday that it had bought $170 million worth of bitcoins. The company purchased 3,318 BTC as a reserve asset, adding to the previous stash it had bought in October.
According to the press release, the firm said, “Square has purchased approximately 3,318 bitcoins at an aggregate purchase price of $170 million. Combined with Square’s previous purchase of $50 million in Bitcoin, this represents approximately five per cent of Square’s total cash, cash equivalents and marketable securities as of December 31, 2020”.
Square has actively invested in cryptocurrencies. It believes cryptocurrencies are instruments of economic empowerment, paving the way for people to partake in a global monetary system and secure their financial future.
This latest development comes after a CoinDesk report revealed Square’s $50M earlier investment in Bitcoin is now worth over $250 million. The company bought 4,709 bitcoins at $50 million in October 2020. However, the value appreciated as Bitcoin’s price surged from the $13,000 range in October to currently trading above $50,000.
Square’s earnings report filed with the US Securities and Exchange Commission showed that the company made $4.57 billion in Bitcoin revenue last year. Of the $4.57 billion revenue generated from BTC related activities, $97 million was its gross profit. The company has experienced a massive surge (785%) in Bitcoin revenue year-over-year.
The San Francisco payments giant said that the revenue generated from selling BTC on its Cash App accounted for 8% of total consolidated revenue last year and represented 85% of the total increase in consolidated net revenues.
The company made most of its revenue and profit in the fourth quarter of 2020. Square reported $1.76 billion in BTC revenue and $41 million in gross profit in Q4. The massive increase in revenue and gross profit in Q4 was due to Bitcoin’s price surging to new all-time highs towards the end of the year.
Square CEO Jack Dorsey told investors, “We’re going to focus on increasing transaction limits across the system for Cash App and going to double down on our commitment to Bitcoin and look for new ways to connect our products within the Cash App”.
Square, alongside MicroStrategy, was one of the early corporate entities to invest in Bitcoin. The company invested its reserve funds into the cryptocurrency, and several large corporations like Tesla are making similar moves.