Breaking: Square buys 4,700 Bitcoin – BTC price shoots up $300

  • Square has acquired 4,700 Bitcoin (BTC), worth $50 million, as part of a new investment strategy.
  • The Bitcoin price has reacted nearly instantly to the news and shot up by $300.

Square, the company led by Jack Dorsey, has revealed the purchase of $50 million in Bitcoin in a new investment strategy focused on the cryptocurrency as a reserve asset. In a statement, Square announced the purchase and declared that the company believes Bitcoin is an “instrument of economic empowerment”. Square said Bitcoin is aligned with “the company’s purpose” – to be a vehicle for economic growth for all kinds of people, according to its website.

Thus, Square is following in the footsteps of MicroStrategy. This company announced a few weeks ago that Bitcoin has become its primary reserve asset. As a result, it has purchased about 38,250 BTC, equivalent $425 million. At the time of the announcement, MicroStrategy stated that the purchase is part of a strategy to hedge against dollar inflation.

According to Messari CEO Ryan Selkis, Square’s investment represents 1% of its balance sheet. Therefore, he considers Square’s investment to be “bigger” than MicroStrategy’s and referred to Square investment as a “reasonable hedge”. In that sense, Square’s CFO, Amrita Ahuja, stated the following:

We believe that bitcoin has the potential to be a more ubiquitous currency in the future. As it grows in adoption, we intend to learn and participate in a disciplined way. For a company that is building products based on a more inclusive future, this investment is a step on that journey.

In the crypto community, the news has been taken as highly bullish. Morgan Creek Digital co-founder Anthony Pompliano noted that the market could be at the beginning of a wave of corporate adoption of Bitcoin and predicted that central banks will be the next institutions to adopt the cryptocurrency as a reserve asset.

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“Pomp” said the most important fact about the Square purchase is that the company has made public the documents of its Bitcoin purchase process “because others are considering similar strategies”. MicroStrategy CEO Michael Saylor welcomed the news and congratulated Square’s CEO:

Bitcoin is a good cash reserve asset. My admiration goes to Jack and the Square team for leading the way.

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Bitcoin price reacts nearly instantly

The Bitcoin price reacted almost instantly to the news and shot up by $300. In the last 24 hours, the Bitcoin price has thus increased by 1.15%. After several days of trading around the support level of $10,500 to $10,600, Bitcoin is now trading at $10,883 at the time of release.

Bitcoin trader Josh Rager made a direct link between the purchase made by Square and the rise in BTC’s price and thanked its CEO for “pumping our bags”. On the other hand, a community member pointed out that Square’s share price has also seen a strong uptrend since the announcement.

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About Author

Reynaldo Marquez has closely followed the growth of Bitcoin and blockchain technology since 2016. He has since worked as a columnist on crypto coins covering advances, falls and rises in the market, bifurcations and developments. He believes that crypto coins and blockchain technology will have a great positive impact on people's lives.

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