Square’s Big Buy 💳
Square’s Big Buy
In 2009, Jack Dorsey and Jim McKelvey, both well-known and respected entrepreneurs, founded Square, a company and technology able to aggregate merchant services and mobile payments into a single, easy-to-use service. One of Square’s best-known and most recognizable technologies was their “Square Reader,” a tiny device that could attach onto a smartphone or tablet and read credit and debit cards. This small invention enabled small business owners to accept card payments easily. Although it’s been over a decade since Square began, the company’s innovative drive is yet to falter. Just yesterday in Square’s fourth-quarter financial was an exciting purchase. The company bought over 3,000 bitcoins, or $170 million. The investment comes in addition to Square’s previous buy of Bitcoin back in October of 2020 when Bitcoin already made up 5% of the company’s total assets.
When zooming out, it appears that more and more companies are piling into Bitcoin. Not only is Square doubling down, but a few weeks ago, Tesla announced it bought $1.5 billion worth of bitcoin for “more flexibility to diversify further and maximize returns on cash.” As more and more companies begin to accept bitcoin as a payment method, Bitcoin becoming mainstream may become a reality.
But not everyone is so confident; Matt O’Brien of the Washington Post put it nicely, explaining that Bitcoin’s extreme volatility means that prices tend to either rise 200 or 300 percent or, more often, fall 80 to 90 percent against it. (To give you an idea of how extreme that is, the last time the United States experienced sustained deflation was during the Great Depression when prices fell 10 percent per year). Bitcoin has some hurdles to overcome before it can become fully viable, but problems will always exist as with any invention.
What do you think about Bitcoin’s potential to go mainstream and would you use bitcoin to purchase things?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.