Square is making another big bet on bitcoin.
The financial services company, which is led by Twitter co-founder and CEO Jack Dorsey, announced Thursday that it bought 4,709 bitcoins at the price of $50 million. The investment represents almost 1% of the company’s total assets as of the second quarter of 2020.
“We believe that bitcoin has the potential to be a more ubiquitous currency in the future,” Square’s Chief Financial Officer, Amrita Ahuja, said in a statement. “As it grows in adoption, we intend to learn and participate in a disciplined way.”
Square shares were trading up about 2.3% midday Thursday.
This is not Square’s first foray into crypto. In 2018, the company expanded its mobile payment service Cash App to support bitcoin trading, even for users without a bank account. And in 2019 it launched Square Crypto, which awards grants to bitcoin developers and designers.
So far, Square’s bullishness on bitcoin has paid off. In August, the company reported that bitcoin trading revenue from Cash App rose 600% from the previous year to $875 million. The cryptocurrency also accounted for almost half of Square’s total sales of $1.92 billion.
Bitcoin has had a good year: It’s up more than 50% in 2020, partly because the US dollar has taken a hit during the pandemic. After Square announced the investment, the price of one bitcoin rose more than 2% to about $10,900.