qr code: Square Says It Bought $50 Million of Bitcoin; Shares Rise

© TheStreet Square Says It Bought $50 Million of Bitcoin; Shares Rise

Square shares rose Thursday after the payments company said it bought about 4,709 bitcoins for $50 million.

That equates to $10,617 per bitcoin. Bitcoin recently traded at $10,735.

Square shares recently traded at $183.51, up 1.9%. The stock has nearly tripled this year.

Bitcoin isn’t used for many standard commercial transactions because of its volatility and because of scandals in which bitcoin disappeared.

At this point bitcoin mostly serves as a vehicle for speculation.

Bitcoin has soared 49% so far this year, making many investors happy. But given its role primarily as a speculative currency, that move can easily reverse, as it has several times in the past few years.

Bitcoin rose as high as $19,141 in December 2017 and fell as low as $3,253 in December 2018.

As for Square, it “believes that cryptocurrency is an instrument of economic empowerment and provides a way for the world to participate in a global monetary system, which aligns with the company’s purpose,” it said in a statement.

The investment represents some 1% of Square’s total assets as of the end of second-quarter 2020.

Square, San Francisco, has a history with bitcoin. It launched bitcoin trading in 2018 for its Cash App customers. In 2019, the company formed Square Crypto, a team contributing to bitcoin open-source.

Square also recently launched the Cryptocurrency Open Patent Alliance, a nonprofit organization encouraging crypto innovation and opening access to patented crypto inventions.

The company has open-sourced documentation to explain the execution of its bitcoin purchase as others consider similar strategies, it said. The white paper is available at squareup.com/investors.

This article was originally published by TheStreet.