CFO Amrita Ahuja told CNBC on Wednesday that Square’s cash app platform saw a surge in first-time bitcoin buyers last month.
“In 2020 we had 30 million people transacting in Bitcoin through the Cash app and 1 million new ones in Bitcoin in January. [2021]”A day after his company made the announcement, he bought the world’s largest cryptocurrency with cash on the fintech company’s balance sheet,” Ahuja said on Squawk Alley.
The Cash app is Square’s peer-to-peer payment platform, allowing users to buy and sell assets such as bitcoin and stocks.
Bitcoin interest among cash app users rose in January with a steady side-scrolling move in digital coins over the past month. January. On the 1st, Bitcoin trades below 30 30,000 per unit. About a week later it made પ્રથમ 40,000 for the first time, although in the second half of January it largely retreated in value.
After making its first trip above $ 50,000 last week, Bitcoin topped the Sunday L-Time High at ,000 58,000. Even with tangible gains on Wednesday, a major seller earlier this week took Bitcoin below $ 50,000. However, Bitcoin is still more than 70% year-to-date and more than 400% in the last 12 months.
After a more limited rollout in the previous fall, Square began allowing all its users to buy and sell Bitcoin through its payment app in January 2018. Its initial entry into the crypto market came at a time when Bitcoin was in the midst of a big boom in 2017, hitting a record high of about $ 20,000 in December. Bitcoin then lost 80% of its value, after what became known as the “crypto winter”, during 2018 it came to a major backslide.
But in 2020, Bitcoin began a huge boom as a number of high-profile investors embraced the digital token as a strong inflation hedge and companies like PayPal stabilized.
Square itself bought a million 50 million bitcoins in October using existing cash on its balance sheet. On Tuesday, a Jack Dorsey-led pay firm announced that it had bought an additional 170 million bitcoins. Ahuja told CNBC that both bitcoin purchases accounted for about 5% of the company’s cash holdings.
Square’s Bitcoin holdings – a total of 8,027 coins – were worth about 400 400 million at Wednesday’s price. Duterte, one of the most popular proponents of Bitcoin, once predicted that it would eventually become the “single currency” of the Internet. He also runs Twitter.
“We feel that Bitcoin is aligned with our purpose, which is economic empowerment,” Ahuja said, describing Square’s investments. “Economic empowerment is about extending broad access to financial instruments that weren’t there before. We think Bitcoin is one way to enable it for the future.”
Crypto Bulls has compared Bitcoin to “digital gold” and said it has a supply of 21 million units, so it could be a powerful store of value. About 18.64 million bitcoins are currently circulating, according to Koiendsk. The new bitcoins come on the market as a reward for so-called miners who use highly powered computers to check transactions in decentralized networks.
Volatile trading is a feature of Bitcoin, and some cryptocurrencies are a cause for concern when a company invests in its balance-sheet cash digital assets.
“We think about the long-term arc,” Ahuja said when asked about the volatility. “Overall, the investment we’ve made is 5% of our cash, and through the cash app we have a bitcoin related business accounting for 5% of our total profits. We will evaluate this investment on an ongoing basis. We will remain dynamic. We will respond to the market environment. But ultimately the long-term vision is what we’re investing in. “
Other companies recently set up in Crypto include Tesla, which announced earlier this month that it had bought બ 1.5 billion worth of bitcoin. Bank of New York Mellon, the oldest bank in the U.S., said on Feb. 11 that it plans to launch a digital asset division later this year.
Square, which has risen more than 200% in the past 12 months, fell more than 6% on Wednesday to around 0 240 per share.
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