Expert Take: Square Buys $50 Million Worth Of Bitcoin
Earlier today, payments company Square SQ +1.8% announced that it had purchased $50 million worth of bitcoin, a development that generated significant visibility.
Square, which was cofounded by Twitter TWTR
+0.3% CEO Jack Dorsey, bought more than 4,700 units of the digital currency,
enough to account for roughly 1% of the organization’s assets as of the end of
this year’s second quarter.
Square revealed this transaction shortly
after business intelligence firm MicroStrategy MSTR +7.1% purchased more than
$400 million worth of bitcoin over the last few months.
MicroStrategy revealed in August that it
had acquired $250 million worth of the cryptocurrency, and announced an
additional $175 million investment in September.
Several experts commented on the recent
purchase made by Square, weighing in on its implications.
Tim Enneking, managing director of Digital
Capital Management, described this latest news as “a tremendous endorsement”
for bitcoin.
“Although the MicroStrategy investment is considerably more, the
company and its CEO (Michael Saylor) are not nearly as well known as Square and
Dorsey, particularly in the tech sector,” said Enneking.
John Todaro, director of institutional
research for TradeBlock, also spoke to the significance of this latest
announcement.
“Unlike institutional investment adoption from a fund standpoint,
which we have seen in the past, we are now seeing institutional adoption from a
corporate standpoint in which bitcoin is being treated less as a speculative
investment and more as an inflation resistant reserve asset on corporates’
balance sheets,” Todaro added.
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