Topic: Square invests 50 million USD in BTC: instrument of economic empowerment (Read 802 times)

Block Announces First Quarter 2024 Results

May 02, 2024
DISTRIBUTED-WORK-MODEL/OAKLAND, Calif.--(BUSINESS WIRE)-- Block, Inc. (NYSE: SQ) has posted its results for the first quarter of 2024 on the Financials section of its Investor Relations website at investors.block.xyz and filed these results with the Securities and Exchange Commission.

Block will host a conference call and earnings webcast at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time today to discuss these financial results. To register to participate in the conference call, please visit the Events & Presentations section of Block’s Investor Relations website at investors.block.xyz.

Block also announced today a strategic investment into bitcoin following numerous positive developments both within the company and in the broader market. In April, Block implemented a bitcoin dollar cost average (DCA) purchase program that will run through 2024. Under the program, Block will be investing 10% of its gross profit from bitcoin products into bitcoin purchases.

Aligned with the company’s purpose, Block believes that bitcoin is an instrument of economic empowerment, providing a way for individuals to participate in a global monetary system and control their own financial future. In a new memo, Block has outlined its strategy for company owned bitcoin held for investment purposes, including its historical purchase execution, storage mechanics, and insurance and accounting considerations. The company plans to assess its aggregate investment in bitcoin relative to its other investments on an ongoing basis.

About Block

Block, Inc. (NYSE: SQ) (formerly, Square, Inc.) is a global technology company with a focus on financial services. Made up of Square, Cash App, TIDAL, and TBD, we build tools to help more people access the economy. Square makes commerce and financial services easy and accessible for sellers with its integrated ecosystem of technology solutions. With Cash App, anyone can easily send, spend, or invest their money in stocks or bitcoin. Afterpay brings Square and Cash App together, connecting consumers and businesses. Artists use TIDAL to help them succeed as entrepreneurs and connect more deeply with fans. TBD is building an open source platform and developer infrastructure that enables everyone to access and participate in the global economy.

For April 2024, the amount purchased under the DCA was $4.4 million.

Cash App generated $2.72 billion of bitcoin revenue and $55 million of bitcoin gross profit during the second quarter of 2021, each up approximately 3x year over year. Bitcoin revenue and gross profit benefited from year-over-year increases in the price of bitcoin and bitcoin actives, and growth in customer demand. Compared to the first quarter of 2021, bitcoin revenue and gross profit decreased on a quarter-over-quarter basis, driven primarily by relative stability in the price of bitcoin, which affected trading activity compared to prior quarters.
In future quarters, bitcoin revenue and gross profit may fluctuate as a result of changes in customer demand or the market price of bitcoin, particularly as we lap strong growth rates on a year-over-year basis in the second half of 2020.

Indeed, custody has been a critical aspect of Bitcoin UX in the past and continues to be a cumbersome task for most users. Not everyone will have the privilege to afford professional custody, provided that one of such acts in the relevant juristiction. Hence solution like this will greatly help the use of bitcoins.

Jesse Dorogusker said that the Bitcoin hardware wallet product must have the following directions: Bitcoin first, global distribution, multi-signature to achieve "assisted self-custody", and give priority to mobile usability.

Square will also create its own hardware wallet and a service for storing bitcoin. This was announced by the head of the hardware product development department of the payment company, Jesse Dorogusker. Given the fact that there are really a lot of problems in the hardware wallet market, I think the appearance of new products will give users more choice.

This company really know what to put on their bags, they wouldn’t bought it without a reason they probably they want to miss Bitcoin. I feel positive about this and sooner or later more companies will follow their steps, companies are fomoing now or others might secretly bought some Btc’s.

These tables are quite confusing for me. I use only https://www.bybt.com/Grayscale where I can see 653K BTC's in Greyscale possesion. And this hasn't changed for 3 months, meaning no buying occured. Which is strange, since the other day they announced a buy for $200mil which would be 3-4K BTC but this is not visible on the chart. They also are going to buy more with $550mil in the next days/weeks. And that negarive premium - to whom are they selling those shares?

Bitcoin costs are the total amount of bitcoin that we purchase.
We purchase bitcoin to facilitate customers’ access to bitcoin

Square Inc. said it purchased $170 million in Bitcoin, further committing to the cryptocurrency and raising its holdings to about 5% of the company’s cash and equivalents.

You are correct, I got once again stuck in the middle of an edit and left inconsistent digits: the total wealth is 360,000 billions, or 360 trillions. The important thing is the final bitcoin value is correct at 175,000 USD!

I am pretty sure there must be something wrong with that calculation, are you sure that total wealth is at 360 billion?

One of the first "model" I used when I decided to buy Bitcoin was based on the question: "What happens if everyone decides to buy 1% of their financial wealth in Bitcoin?"

Well the answer is this one (updated figures):

World Adult Wealth (bln)   360
1% of such Wealth is (bln)   3.6
   
   
Circulating Bitcoin   21,000,000
This is an overstatement, but I want conservative estimates.

   
Bitcoin Value   3,600,000,000,000/21,000,000 equal to USD 171,428.57.

So, yes, 1% is a lot!

I am not sure that anyone would say that the company’s 1% investment is too small, like seriously? They invested 1% of the company’s total asset which is worth $50 million, how is that a small amount? That’s a huge amount and is enough already if they decide.

It’s recommended that people should around 1% to 5% of their total assets in cryptocurrency, so they did the right thing, because even that, is a very high amount of money.

Although that for some of us, our 1% to 5% would be very useless when invested in cryptocurrency. As for those who have the money, they can go for it and keep investing , at least the community should be growing. This step can motivate other companies to take the same step.

If you want to speculate it’s plently of other regulated or not regulated asset classes to speculate on.
Probably same volatility, far less problems cashing out.

If you are reading this, am sure you think bitcoin has more interesting aspect than a long short strategy on EURUSD or TSLA.

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Personally I'm a speculator. I came for the price swings, I stayed for the technology. I love markets and economic theory so it's hard for me to think of Bitcoin price as uninteresting.

I have never used Cashapp because I am not living in one of their markets. I didn't say they are going to be the "Amazon of Bitcoin", I was only trying to figure out why the market is pricing them with those borderline-absurd multipliers.

I have never been in a so strong disagreement with someone in this forum. That is your respected opinion. Don’t think it is universally true.

We are here to make money and get rich thts Main reason btc 100k and cash out money in pocket That's the biggest goal of cryptocurrency SPECULATORS and GAMBLERS

We are here to make money and get rich thts Main reason btc 100k and cash out money in pocket That's the biggest goal of cryptocurrency

Can translate for average person what You mean?
Are we getting Rich or not by holding btc?
That's all we want to know ;

Bitcoin isn't a get rich quick scheme, it's a don't get poor slowly scheme.

Many people state on twitter that the 50 million have nothing to do compared with the amount that MicroStrategy invested recently, but comparisons are hateful.

I think it is really good news as it serves as an example for many other companies that may make a bold investment or just gain some awareness with these same news.

I hope many others follow their path

Many people state on twitter that the 50 million have nothing to do compared with the amount that MicroStrategy invested recently, but comparisons are hateful.

You mean that's all you want to know.  Some people are here to expand their knowledge and understanding.  Not everyone is looking for shortcuts.  Also, be careful when asking for advice if you aren't in a position to verify what you're being told.

Can translate for average person what You mean?
Are we getting Rich or not by holding btc?
That's all we want to know ;

Square invests 50 million USD in BTC: instrument of economic empowerment   

Can translate for average person what You mean?
Are we getting Rich or not by holding btc?

That's all we want to know ;

I do agree, but I disagree on the rationale.
Now that two listed companies showed that it is possible to hold bitcoin, I guess every CFO will look at the possibility to hedge the future debasement scenario (just remember how skyrocketing the FED balance sheet went during last months).
Buying 1% of free reserve of Bitcoin would hypothetically expose to a total loss of 1% (do you really see BTC going to zero?) while exposing the firm to a potential 100X upside in the case of a debasement.
Just remember when Ray Dalio bought a put on the SPX with 1% premium? Basically the same thing, being BTC a put option on the USD.
This is a low hanging fruit waiting to be picked up.

IMO, isn't a surprise.
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It would seem to be a sensible strategy. I've been surprised that this isn't more common. Whilst big investors can have a tendency to be risk-averse, which might keep them away from bitcoin, it's also true that every investment is a gamble, so why not test the waters by buying in with at least (in percentage terms) a small position? Perhaps it's just that they don't want any negative PR from associating with what is still sometimes seen in the mainstream as a counter-cultural and even potentially criminal asset class.

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.

<...>
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.

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...

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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 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. 

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.

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

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


Press release from Square:


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.

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

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

. 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.

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% 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...

Great! The price of Bitcoin jumped after the deal.

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

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...

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

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

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

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!

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.

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'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...

*SQUARE: CRYPTOCURRENCY AN INSTRUMENT OF ECONOMIC EMPOWERMENT

*SQUARE INVESTS $50M IN BITCOIN

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.