Square buys $ 170 million more in bitcoin to boost crypto holdings

Square (SQ) announced Tuesday that it bought $ 170 million in bitcoin to add to its expanding position.

The payment company’s new purchase now brings its total bitcoin holdings to about 5% of its cash and cash equivalents. Averaging 3,318 bitcoins, Square says it bought would indicate an average price of around $ 51,235 per bitcoin (BTC-USD). The cryptocurrency had dropped below $ 48,000 on Tuesday at the time of Square’s announcement.

“Aligned with the company’s purpose, Square believes that cryptocurrency is an instrument of economic empowerment, providing a way for people to participate in a global monetary system and secure their own financial future,” the company wrote in a statement from press before your earnings call. . “The investment is part of Square’s ongoing commitment to bitcoin, and the company plans to evaluate its aggregate investment in bitcoin relative to its other investments on an ongoing basis.”

Square had previously purchased about $ 50 million worth of bitcoin in October 2020. At the time, the purchase equaled about 1% of the company’s cash and cash equivalents.

For comparison, Tesla’s purchase of bitcoin for $ 1.5 billion amounted to about 8% of Tesla’s cash equivalents when it was announced in early February. That position had already increased by around $ 1 billion when bitcoin surpassed $ 58,000 to hit a new all-time high before the cryptocurrency collapsed this week to roughly $ 48,000. This weekend, Tesla CEO Elon Musk tweeted that the price of bitcoin seemed “high.”

Business intelligence software company MicroStrategy was the first publicly traded company to add bitcoin to its balance sheet last year. Its CEO, Michael Saylor, told Yahoo Finance earlier this month that other companies were likely to follow Tesla and Square in adding bitcoin to their cash holdings. He made his prediction shortly after holding a virtual conference with around 1,000 business leaders and just before his company submitted an application to raise more than $ 500 million to buy more bitcoins. Saylor was quick to take to Twitter to celebrate that Jack Dorsey led Square to double its bet on bitcoin in a tweet Tuesday.

Square’s stock fell about 5% in after-hours trading after reporting mixed results. Bitcoin changed shortly after Square’s announcement, hovering around $ 48,000.

Zack Guzman is a presenter for Yahoo Finance Live, as well as a senior writer covering entrepreneurship, cannabis, startups, and breaking news on Yahoo Finance. Follow him on Twitter @zGuz.

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