Square invests 50 million USD in BTC: instrument of economic empowerment - page 3.

adzino

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Quote from: fillippone on October 10, 2020, 02:01:27 AM

Very true. And cashapp can for sure be the “next Amazon” delivering bitcoin to every householdin the US.
The only disturbing fact is the number of stocks with such multiples on the market. How many “next Amazon” can be around? But this is OT here...

The number of scams going through cashapp is quite concerning. I remember reading a news few days ago where a merchant got scammed after accepting cashapp from one of its random client. Check reddit, there are thousands of people complaining how they are getting scammed and having no protection at all from those scams. Also, there are shit tons of users making cashapp accounts with fake/stolen identities. But, yeah. Scams are everywhere. It is just us who has to be careful.
Though why is cashapp going to be the next amazon for delivering bitcoin? The last time I used cashapp with crypto currency buy/sell enabled, it wasn't user friendly at all.

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Quote from: exstasie on October 10, 2020, 01:30:29 AM

<...>
It could turn out like Amazon: in the early years, not profitable, but extremely quickly growing and amassing market share. That's traditionally what matters with growth stocks. Not short term profitability, but growth and market share.

Very true. And cashapp can for sure be the “next Amazon” delivering bitcoin to every household in the US.
The only disturbing fact is the number of stocks with such multiples on the market. How many “next Amazon” can be around? But this is OT here...

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Quote from: The Sceptical Chymist on October 09, 2020, 01:38:47 PM

Very interesting story here, and this is really making me wonder what the hell is going on such that we've got publicly traded companies buying up bitcoin as their cash reserve.

I put SQ on my watchlist and took a look at some of their stats. This in particular does not bode well for the long term:

A lot of companies on the NASDAQ don't pay dividends, but that P/E and the fact that it's trading at the very top of its 52-week range make me think this is one of the stocks that speculators drove up during the COVID-19 lockdown.

True, it may be over hyped right now, but they are also a first mover in an extremely high growth sector.

It could turn out like Amazon: in the early years, not profitable, but extremely quickly growing and amassing market share. That's traditionally what matters with growth stocks. Not short term profitability, but growth and market share.

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Quote from: The Sceptical Chymist on October 09, 2020, 01:38:47 PM

Very interesting story here, and this is really making me wonder what the hell is going on such that we've got publicly traded companies buying up bitcoin as their cash reserve.

I put SQ on my watchlist and took a look at some of their stats. This in particular does not bode well for the long term:

A lot of companies on the NASDAQ don't pay dividends, but that P/E and the fact that it's trading at the very top of its 52-week range make me think this is one of the stocks that speculators drove up during the COVID-19 lockdown.

But we'll see. I'm keeping my eye on it, and thanks for posting this OP.

It look like they are slowly moving stock market capital into bitcoin.
Not Directly in btc but trhough trust funds or Something like that.

The Fiat currency is getting cheaper to fight against inflation you need to have an asset what produces income to you.

Best performance will be btc if really it goes to 50k-100k.

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Quote from: fillippone on October 08, 2020, 11:48:58 AM

Square just decided to follow up MicroStrategy footsteps buying 1% of their total assets in Bitcoin.

Quote

*SQUARE: CRYPTOCURRENCY AN INSTRUMENT OF ECONOMIC EMPOWERMENT

*SQUARE INVESTS $50M IN BITCOIN

https://twitter.com/deitaone/status/1314189340726177793?s=21

Press release from Square:

Quote

SAN FRANCISCO, CA – October 8, 2020 – Square, Inc. (NYSE: SQ) announced today that it has purchased approximately 4,709 bitcoins at an aggregate purchase price of $50 million. Square 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. The investment represents approximately one percent of Square’s total assets as of the end of the second quarter of 2020.

This translate in a 10,617 USD average price. They have beaten Microstrategy entry point at 11,111 USD per Bitcoin.

They released a very interesting press release on their investment, detailing rationale and execution:

Square, Inc. Bitcoin Investment Whitepaper

As I like to follow those “big swinging dicks” in the bitcoin ecosystem (Grayscale, Microstrategy, and now Square) I think it is nice to have a well organised thread on the news.

They invested 1% of their total assets. I think this is something every CFO should be looking at, given the highly asymmetrical returns of a bitcoin investment.

Percentage of total assets doesn't seem like a very meaningful measure because a company can't convert all its assets to investable cash and still have a functioning business. Say you take a real estate company that has bitcoin holdings. The percentage of bitcoin assets to overall assets isn't meaningful because the vast majority of the company's assets are going to be in real estate that wouldn't be invested in any other asset class, because that is the business. Same for Square. There's a portion of the assets related to their business that are never going to be convertible to other assets. I think a more meaningful way to track a company's exposure is measuring bitcoin's share of the company's liquid assets.

The Sceptical Chymist

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Very interesting story here, and this is really making me wonder what the hell is going on such that we've got publicly traded companies buying up bitcoin as their cash reserve.

I put SQ on my watchlist and took a look at some of their stats. This in particular does not bode well for the long term:

A lot of companies on the NASDAQ don't pay dividends, but that P/E and the fact that it's trading at the very top of its 52-week range make me think this is one of the stocks that speculators drove up during the COVID-19 lockdown.

But we'll see. I'm keeping my eye on it, and thanks for posting this OP.

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So 50k-100k btc not far?

Its a massive capital inflow ln btc now!

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Quote from: fillippone on October 08, 2020, 11:48:58 AM

This translate in a 10,617 USD average price. They have beaten Microstrategy entry point at 11,111 USD per Bitcoin.

Leave it to Jack Dorsey, not to be outdone! I remember thinking "this is something Square would do" when Microstrategy made their announcement about investing in BTC. Good stuff.

Quote from: jackg on October 08, 2020, 11:56:22 AM

I'm trying to remember what they do, are they a payment processing firm?

Their "Cash App" is just like Venmo. It's pretty popular for P2P payments now. They've also integrated a Bitcoin buy/sell service which is growing fast: Square’s CashApp Bitcoin Volume for Q1 2020 at $306 Million

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Bagging in this huge btc shows that global level entrepreneurial interest has grown a lot in cryptocurrencies and this will bring a huge revolution by adding more stability to the markets. This has also blown a bugle and started a competition between companies to try to purchase btc at the best price. Good or bad at present, but these companies that invested in btc know that they will be playing in big numbers some day in the near future.

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Quote from: hatshepsut93 on October 09, 2020, 11:27:52 AM

. Unfortunately, I myself don't follow this strategy and keep having Bitcoin as a majority of my holdings, which might be a horrible decision or a fantastic decision, with very little chance for in-between.

I'm the same but I feel like I could earn it back within a year so I'm not to bothered by it. If you can't, maybe cash out a little and move it to some undervalued shares (based on numerical analysis - not opinion) ...

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Quote from: jackg on October 08, 2020, 11:56:22 AM

1% seems both tiny and huge at the same time. I don't think many companies have done similar with gold or something like that recently...

Doesn't seem very small to me, I think a big company commiting 1% of its assets to a risky and volatile one isn't something that happens often. IMO that's how it should be - you put small part of your portfolio in Bitcoin, so if it moons, you'll get a decent profit, but if it fails it won't ruin you. Unfortunately, I myself don't follow this strategy and keep having Bitcoin as a majority of my holdings, which might be a horrible decision or a fantastic decision, with very little chance for in-between.

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Quote from: jackg on October 08, 2020, 11:56:22 AM

1% seems both tiny and huge at the same time. I don't think many companies have done similar with gold or something like that recently...

Looks tiny at first glance but it's still a serious amount, not by converting it into fiat but thinking how much they have at their disposal, they don have all 100% of their funds ready at any time to invest nor it's that easy to convert whatever they have bought earlier to bitcoin like switching from ETH to BTC. It could have been a bit more like 2-3% but I doubt anyone would risk something even close to double digits, not speaking above it.

I'm pretty happy with this as it's about time we stop getting excited at some twitter celebrity buying 50$ worth of coin and look at the bigger picture, especially since this is one company that with the help of its CashApp can really help bitcoin, and not they have a reason for doing so.

Quote from: rollingdice on October 09, 2020, 04:24:38 AM

Great! The price of Bitcoin jumped after the deal.

Probably the market needed a small push to go green, from my point of view it makes no sense right now for Bitcoin to be still under late August prices.

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Great! The price of Bitcoin jumped after the deal. I like Square's strategy, maybe other giants will follow their footsteps.

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https://bit.ly/387FXHi lightning theory

Quote from: Harriti on October 09, 2020, 12:46:07 AM

1% of the Square fund is about $ 50 million and that's pretty much money. It is worth mentioning here that is the news they bring. Because of the investment of Square, a large hedge fund, the price of bitcoin rose more than 2% in the evening alone. I just don't know if this growth is permanent or temporary Undecided

Yeah this could be the spark we've been waiting for to attempt to break the strong resistance at $12.5K... We can hope to see news of levels above that price being sustained for a while - that'd be a nice little bullish signal that'd potentially bring on a new ath in a MUCH longer move...

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Quote from: jackg on October 08, 2020, 11:56:22 AM

I'm trying to remember what they do, are they a payment processing firm?

1% seems both tiny and huge at the same time. I don't think many companies have done similar with gold or something like that recently...

1% of the Square fund is about $ 50 million and that's pretty much money. It is worth mentioning here that is the news they bring. Because of the investment of Square, a large hedge fund, the price of bitcoin rose more than 2% in the evening alone. I just don't know if this growth is permanent or temporary Undecided

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Quote from: avikz on October 08, 2020, 12:17:10 PM

It seems bitcoin market responded quickly on this. The price is almost 2.6% higher alrrady and showing an upward trend. I am frankly not surprised by this step of Square because it's CEO Jack Dorsey is a long time bitcoin bull.

Yeah when I first saw the tweet and post on on some I followed channel on telegram. I already knew the market will spinned it like jagger. This time they made it publicity on being a full time bitcoin supporters.

Anyway good move by that seeing the market slowly recovering.

No doubt they will be positive on bitcoin since Twitter has full advertisement on crypto and blockchain. Anyway I do hope this time the 12k barricade will be crush this time.

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I just heard about this too today. That is great news. The fact that a company this big is hiding reserves in bitcoin is huge. It shows a firm commitment both business and balance sheet they are fully vested. Just another step in the process towards mainstream

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Despite of 1% the investment by a company listed on NYSE looks great. I am saying this from the viewpoint of people who consider bitcoin risky. A company listed on NYSE have to comply thoroughly with the Risk Management Norms. They have to abide by the traditional CAPM market approach thereby getting atleast the expected return on the Beta that they have. So while they would have planned to invest even 1% of their assets they surely would have taken in consideration the Standard Deviation of Bitcoin and it's future volatility that they expect.

Their prime holding is in big stocks like Paypal, Zoom, Twitter etc. With investment in bitcoin they might be interested in increasing the overall return on the portfolio. This might even encourage other investment companies to think upon adding bitcoin as an asset in their folio if they are running at a lower risk profile than what they want.

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Quote from: fillippone on October 08, 2020, 11:48:58 AM

This translate in a 10,617 USD average price. They have beaten Microstrategy entry point at 11,111 USD per Bitcoin.

Very similar buy in points, even though both purchases were a couple of months apart. Both values when considered retrospectively would be bargains in the near future as Bitcoin grows to match the level of interest from investors and bullish sentiment about the technology.

Quote from: fillippone on October 08, 2020, 12:18:12 PM

Regarding 1%, I think in the future no major firm will have less than 1% of their assets in Bitcoin.

The reality is, there would likely not be enough bitcoins for every major firm in the world to own at least one percent of their holdings in the asset. So, those that do get in now at values of $10-11k range are way ahead of the curve. They can sit back and decide when to sell to the other firms, when they eventually catch up with the train (if at all they do sell).

Edit:
What makes this investment even bigger could be the ripple effect it has on Bitcoin adoption. Founder of Twitter and CEO of Square Jack Dorsey who has been very vocal about his support of Bitcoin, tweeted about the investment recently and how they would integrate Bitcoin into other payment platforms;

Quote

And FAR more important than that is us investing directly in open source development with
@sqcrypto, opening access to patents with COPA (https://open-patent.org), and making BTC more accessible and useful to millions of people with
@CashApp

Source

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Quote from: avikz on October 08, 2020, 12:17:10 PM

It seems bitcoin market responded quickly on this. The price is almost 2.6% higher alrrady and showing an upward trend. I am frankly not surprised by this step of Square because it's CEO Jack Dorsey is a long time bitcoin bull. They would have anyway jumped into this game sooner or later. It's probably the stakeholders approval received recently on spending this huge sum on bitcoin.

Cheers market!

Since it was a direct impact of : Demand and supply plus positive news , I believe we were able to get through the damage that some people think Trump did, due to him catching the virus.

Quote from: fillippone on October 08, 2020, 12:18:12 PM

Quote from: jackg on October 08, 2020, 11:56:22 AM

I'm trying to remember what they do, are they a payment processing firm?

1% seems both tiny and huge at the same time. I don't think many companies have done similar with gold or something like that recently...

They are a payment processor. In addition to that they are quite bitcoin friendly, as they allow their customer to buy bitcoin with their app. So they are constantly buying bitcoin for their clients.
This time they decided to put they money where their mouth is.

Regarding 1%, I think in the future no major firm will have less than 1% of their assets in Bitcoin.

I still believe 1% is comparatively low, If they do trust bitcoins I think they can very easily go till 3-5% , but then again it's better to be safe than sorry and an investment during pandemic is always something that needs a lot of care .

Quote from: jacafbiz on October 08, 2020, 12:14:22 PM

This is very good for Crypto, I believe we will start seeing many f these tech companies follow suit, it doesn't make sense not to take the risk, 1% of your capital in BTC could be what would save the company in future, this just make me thing the $100k per BTC is very conservative

I believe tech-companies are the ones who have to support cryptocurrencies the most , technology is something that does have a hard time being accepted every once in a while and therefore I believe that we have to give them kudos for doing this for sure.

But unfortunately tech companies are most of the times too competitive to even see the big picture.

- The IT sector needs : support plus if these tech companies won't do that I believe no one will.

_*_

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