Cryptocurrency enthusiast Jack Dorsey made what he described as a mission-driven investment when his payments company, Square, purchased 4,709 bitcoins — a $50 million investment that represents 1 percent of the firm’s total assets.
Square’s Cash App product allows customers to buy and sell bitcoin.
“We view bitcoin as an instrument of global economic empowerment,” the company said in its bitcoin investment whitepaper. “It is a way for individuals around the world to participate in a global monetary system and secure their own financial future. This investment is an important step in furthering our mission.”
Square paid an average price of $10,617 for each bitcoin and said it was able to make the $50 million purchase within a day without disrupting the markets, Business Insider reported.
JPMorgan strategists said Square’s $50-million bitcoin investment was a “strong vote of confidence” for the cryptocurrency, according to Coindesk. Other payment companies will likely follow suit or risk getting shut out of a growing segment.
Don’t read too much into Square’s bitcoin purchase, read a headline on the FRNT Financial Morning Note via FuturesMag.com.
“While there remains an outside chance the move encourages others, we believe the attention was for the most part unwarranted as Square is arguably the most committed publicly traded company to BTC,” FRNT noted.
Twitter and Square CEO Dorsey is “a huge believer” in bitcoin and has a vision that the digital currency could become the world’s single currency within the next decade. He has made a long-term commitment to bitcoin, showing support on Twitter and through Square.
Square Crypto is dedicated to growing decentralized networks through the use of development, design, and marketing.
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Dorsey has described bitcoin’s design and ideals as “the most beautiful thing” and one of “the most seminal works of computer science in the last 20 or 30 years,” as detailed in a bitcoin whitepaper.
News of Square’s bitcoin investment caused the crypto price to rally from $10,600 to $11,500 — almost $1,000 in a few days. “The critical factor to watch is whether the $12,000-$12,400 resistance zone breaks as that would imply another impulse wave is on the horizon,” Cointelegraph reported.
Square’s commitment to crypto “is an incremental positive for the space but last week’s announcement (seems) more akin to headline chasing than an identifiable shift in strategy,” according to FRNT.