(Rejected) Jack Dorsey's Square Invests $50 Million In Bitcoin as Part of Corporate’s New Capital Allocation Strategy

Square Inc mobile payment company bought about 4,709 Bitcoins worth of 50 million with one percent of the firm’s entire assets as of the end of the second quarter of 2020. On October 7, the company announced that it is purchasing a huge amount of Bitcoin using corporate cash holdings to what is termed as part of the company’s new capital allocation strategy.   

Bitcoin Aligns with The Company’s Purpose

Due to the rapid evolution of the crypto market and unprecedented time of uncertainty facing the global economy from a macroeconomics regime perspective, the U.S based company believes that the current period is the appropriate time for it to build its majorly dollar-denominated assets and make a significant investment in Bitcoin.

The company sees Bitcoin as a financial instrument of financial support of the world, as it is an instrument for people across the globe to participate in building the global monetary system and investing and thus securing their own financial future. Square Inc. sees such an investment is a vital step in promoting the company’s mission.

Amrita Ahuja, Square’s chief financial officer, said: “We believe that Bitcoin has the potential to be a more ubiquitous currency in the future. As it grows in adoption, we intend to learn and participate in a disciplined way. For a company that is building products based on a more inclusive future, this investment is a step on that journey.”

Square mentioned that although such investments are held in cold storage so that to further protect their Bitcoin holdings, the company maintains a Crime Insurance Policy in order to protect against external or internal theft of Bitcoin in cold and hot wallet storage.

Jack Dorsey, the founder and CEO of Square and the CEO of Twitter, has been an outspoken Bitcoin advocate and enthusiast for a long time. Square has been a leading firm in the cryptocurrency industry since 2018 through its Cash App product, which offers consumers the capability of selling and buying Bitcoin.

In March 2019, the company established Square Crypto, an independent team that aims to promote the growth of the Bitcoin network and offer grants to Bitcoin developers and firms participating in the space. The firm also recently established the COPA (Cryptocurrency Open Patent Alliance), a non-profit organization promoting cryptocurrency innovation, opening access to patent cryptocurrency inventions, and assisting individuals and firms in defending themselves against patent aggressors.

Bitcoin Serves as Inflation Hedge

Square Inc., investing in Bitcoins comes few days after MicroStrategy business intelligence software company making great history on August 11. MicroStrategy became the initial Nasdaq-listed firm to purchase about $200 million worth of Bitcoins as an investment before purchasing another $175 million worth of Bitcoins on September 14. MicroStrategy company decided to make the leading cryptocurrency as its main treasury reserve asset. Michael Saylor, MicroStrategy CEO said: “in the face of the great monetary inflation we are experiencing, Bitcoin seems to me to be the best possible hedge.”