Square continues to bet big on Bitcoin despite the volatile behavior the leading cryptocurrency is having lately. Its shares are tumbling but slowly boosting back up.
Jack Dorsey, famously known as the Twitter CEO, is also the CEO of Square. He’s one of the influential people who help boost the Bitcoin rally frenzy lately. While the BTC price was becoming volatile, Dorsey decided to top up $170 million worth of BTC last Tuesday.
That’s on top of their $50 million purchase last October 2020. However, on the day of their second purchase, Bitcoin dropped heavily, up to 14%, tumbling the BTC price back below $50,000.
According to Yahoo! Finance, Square announced that they purchased an average of 3,318 bitcoins for an average price of $51,235 per bitcoin. However, by the time they released the announcement, BTC dropping enormously below $48K.
Dorsey’s perception of the digital market
Per the Wall Street Journal, Dorsey believes Bitcoin will be the “native currency” within the web.
To participate in the global monetary system, Square, as a company, believes that crypto is “an instrument of economic empowerment.” That’s the reason they mentioned when they released the PR for their $170 million worth of BTC purchase.
Jack Dorsey, CEO of Square, "We're also going to double down on our commitment to #Bitcoin"
— Documenting Bitcoin 📄 (@DocumentingBTC) February 23, 2021
So, basically, it is as if Dorsey confidently believes that crypto will soon be a normal mode of financial exchange. Unfortunately, compared to gold and actual money, crypto is still unregulated.
Tale of two big purchase
But here’s the tale of two company moguls buying BTCs. Elon Musk, through Tesla, bought a billion and a half worth of Bitcoin. After the purchase, the BTC price skyrocketed to the roof—breaking record highs even beyond $58k before it pulled back down.
This massive increase only rattled, even more, the already overly-frenzied digital market. However, when Square made the big purchase, the BTC price went tumbling down. It was bought for around $51K, but at the time the press release went public, the BTC price dipped below $48K.
We're announcing our Q4 and full-year 2020 earnings today after 1pm PT, with our conference call at 2pm PT. $SQ
— Square IR (@SquareIR) February 23, 2021
Following the announcement of the BTC purchase, Square’s share fell on Wednesday, around 7.5%. The shares are still down today, but it did ride up to 2.4% higher after Guggenheim Securities analyst Jeff Cantwell upgraded its stocks from neutral to buy, says MarketWatch.
Accordingly, Cantwell believes that the fall of Square’s stocks was “largely a near-term, momentum-driven negative reaction to this week’s decline in the price of Bitcoin.”
Let us know when you see it pic.twitter.com/M7LMUe6Tre
— Cash App (@CashApp) February 24, 2021
Indeed, crypto is showing quite the potential, as seen in the recent bullish frenzy. However, the behavior of digital assets is still volatile, which is raising concerns from known analysts. But with the craze BTC is bringing right now, many more are interested in crypto trading, and with Square’s added BTCs, it will hopefully help the company’s shares boost back up soon.
Featured image courtesy of Jorge Franganillo/Flickr