Square Moves Company Reserves worth $50 million to Bitcoin
This year, there has been a marked increase in institutional crypto adoption, with various companies shifting their assets into cryptocurrency. The latest company to jump aboard the crypto bandwagon is Square, the payment processor led by Jack Dorsey, founder of Twitter. The Silicon Valley firm announced earlier today that they had acquired a total of 4,709 BTC, which is worth $50 million. Referring to this move, Square explained that they regard crypto as a tool for economic empowerment, which enables everyone to be a part of a borderless economic system. Since Square is also focused on boosting financial inclusion, the investment in crypto is just in accordance with it.
Square also disclosed that the purchase of Bitcoin was roughly 1% of its total assets in the second quarter. It is one of the companies that have reaped a lot of benefits due to their involvement in the crypto space. In the second quarter, the financial firm announced that it had earned a revenue of $84 million from Bitcoin trading on its crypto-focused subsidiary called Cash App. The quarterly performance showed an increase in revenue of 600% and a surge in gross profit of 710% as opposed to the same period in 2019. As compared to the first quarter of the year, gross profits increased by 150%.
Almost 2.85% of the entire profit of the company for the quarter was contributed by Bitcoin-related businesses, which was at $597 million. However, quarterly expenses worth $858 million were soaked up by the Cash App Bitcoin business, which brought the profit of the entire division to $17 million. There are approximately 30 million active users on the Cash App now. The Silicon Valley company has now joined the list of an extensive list of companies that have converted a significant part of their assets into Bitcoin. MicroStrategy, the business intelligence solutions provider, is the most prominent one.
The Virginia-based company has been on a buying spree in the last couple of weeks. The tech giant confirmed in July that they had opted to use Bitcoin for their primary asset base. It purchased 21,454 BTC, which was worth $250 million. Days later, the company informed the Securities and Exchange Commission (SEC) that they would purchase more of Bitcoin. They kept their word as the CEO of MicroStrategy, Michael Saylor soon announced that they had bought an additional 16,796 BTC for a price of $175 million.
The company is now in an excellent position to hedge with the asset, as their total has reached $425 million. However, Grayscale Investments is the primary firm that’s driving institutional growth. It is the largest global crypto-focused asset management company and manages $5 billion worth of assets. Grayscale is now managing a total of 449,000 coins, which are worth $4.9 billion, if one BTC is taken at a value of $10,890. This means that the company is holding nearly 2.4% of the total market capitalization of Bitcoin. Since Bitcoin’s supply will be 21 million, there are only 2.5 million Bitcoin tokens left for mining.
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