15.6 C
October 2, 2022
Image default

Square buys BTC and … loses

Payment giant Square said on Tuesday it had bought an additional $ 170 million in bitcoin (BTC). The previous tranche was purchased in October. Square buys BTC and consequently corrections … it loses several million.

Square buys Bitcoin

According to a payment processor press release, the company added 3,318 BTC to its vault for $ 170 million. The mathematical calculation results in a purchase price of one bitcoin of $ 51,235.70.

Unfortunately for Square, after it hit a record high of $ 58,000 last weekend, bitcoin’s price has dropped to $ 44,964.49. At the time of writing this article, the price has returned to the $ 50,000 mark.

The information was presented just after 4pm on February 23. Bitcoin’s price was below $ 48,000 back then, meaning that 3,318 BTC was worth less than $ 160 million back then.

By revealing a loss of more than $ 10 million on its latest BTC investment, the company may inadvertently confirm the arguments of JPMorgan analysts. They believe that many companies will not follow Square and Tesla’s footsteps. The main reason, of course, is the volatility of cryptocurrencies.

The company presented the information about the purchase of BTC just before the publication of the financial statements for the fourth quarter of 2020. The new investment increases Square’s portfolio. The company previously purchased 4,709 BTC in October 2020. At that time, it was worth $ 50 million. These BTCs are currently worth $ 224 million.

The company has a total of $ 4.4 billion in cash and securities. 220 million is only 5% of the value of all its liquid assets.

Jack Dorsey, creator of Square.

Other giants

It is worth remembering that stumbling over Square is only a drop in the ocean of institutional investments from the last year. Tesla’s recent investment has allowed the company to earn up to $ 900 million in full money. Investing in cryptocurrencies may seem dangerous for many companies, but allocating part of your capital (at the level of 5%) is not a risky decision. Especially since Bitcoin has shown many times that it can deliver gigantic returns on investment. Whether Square buys BTC and loses its fortune or earns millions will be a foregone conclusion in the future.

Related posts

How soon will excavators return in your country? | Blocksats

Aparnna Hajirnis

US inflation hits the highest in 4 decades, according to report

Anupreet Kaur

Bitcoin above 47,000 in August, says Plan B

Aparnna Hajirnis

Leave a Comment