Square (SQ) announced on Tuesday that it bought $ 170 million in bitcoins to increase its expanding position.
The payment company’s new purchase now brings its total bitcoins to approximately 5% of its cash and cash equivalents. Calculating the average of 3,318 bitcoins that Square says it bought would indicate an average price of around $ 51,235 per bitcoin (BTC-USD). The cryptocurrency fell to less than $ 48,000 on Tuesday at the time of Square’s announcement.
“In line with the company’s purpose, Square believes that cryptocurrency is an instrument of economic empowerment, providing a way for individuals to participate in a global monetary system and ensure their own financial future,” wrote the company in a press release before of your profit call. “The investment is part of Square’s ongoing commitment to bitcoin, and the company plans to evaluate its aggregate investment in bitcoin against its other investments on an ongoing basis.”
Square had previously purchased about $ 50 million in bitcoin in October 2020. At the time, the purchase amounted to about 1% of the company’s cash and cash equivalents.
For comparison, Tesla’s $ 1.5 billion bitcoin purchase represented about 8% of Tesla’s cash equivalents when it was announced in early February. That position had already increased by about $ 1 billion when bitcoin surpassed $ 58,000 to reach a new historic record before the cryptocurrency crashed back this week to around $ 48,000. This weekend, Tesla CEO Elon Musk tweeted that the price of bitcoin seemed “high”.
Business intelligence software company MicroStrategy was the first publicly traded company to add bitcoin to its balance sheet last year. Its CEO, Michael Saylor, told Yahoo Finance earlier this month that other companies would likely follow Tesla and Square in adding bitcoin to their cash. He made his prediction shortly after holding a virtual conference with about 1,000 business leaders and just before his company filed for a withdrawal of more than $ 500 million to buy more bitcoins. Saylor was quick to use Twitter to celebrate Jack Dorsey, prompting Square to double the price of bitcoin in a tweet on Tuesday.
Square today announced that it bought ~ 3,318 bitcoins at an aggregate purchase price of $ 170 million. Combined with Square’s previous purchase of $ 50 million in #bitcoin, this represents about five percent of total cash, cash equivalents and marketable securities as of 12/31/2020
– Michael Saylor (@michael_saylor) February 23, 2021
Square’s shares fell about 5% on the floor after the exchange closed, after reporting mixed results. Bitcoin changed little after Square’s announcement, hovering around $ 48,000.
Zack Guzman is an anchor of Yahoo Finance Live and also a senior writer who covers entrepreneurship, cannabis, startups and breaking news on Yahoo Finance. Follow him on Twitter @zGuz.
Read the latest financial and business news from Yahoo Finance
Follow Yahoo Finance on Twitter, the Facebook, Instagram, Flipboard, SmartNews, LinkedIn, You Tube, and reddit.
Find live stock market quotes and the latest business and finance news
For tutorials and information on investing and trading stocks, check out Cashay