On October 7th, Square announced that they purchased $50 million worth of Bitcoin for their treasury. Square believes that Bitcoin has the potential to be a more ubiquitous currency in the future. Square did not buy these Bitcoins to sell it to customers but as a reserve asset and store of value. This is a huge vote of confidence for crypto. The 4,709 Bitcoins now make up around 1% of Square’s total assets and will probably add more in the future. Square is an increasingly dominant player in finance. It processes a very large chunk of credit card purchases and is becoming a very large lender to small businesses. Its Cash App is used by 30 million people to transfer money and buy Bitcoins. It’s one of the biggest players in financial innovation worldwide.
Microstrategy is another company that adds Bitcoin to its balance sheet as a treasury asset. It has bought $450 million of Bitcoin, more than a quarter of the company’s total value based on market capitalization.
Publicly-traded companies now own at least $7 billion dollars worth of Bitcoin. The biggest of them all is the Grayscale Bitcoin Investment Trust with more than $5 billion invested in Bitcoin. GBTC alone is buying the equivalent of 77% of all newly-mined coins.
Bitcoin is in a good position right now. The world’s money managers are desperate for alternative investments.
Sven Franssen