The Cash Square platform saw an increase in bitcoin buyers for the first time last month, CFO Amrita Ahuja told CNBC on Wednesday.
“3 million of us were moving in bitcoin through Cash App in 2020 and 1 million were new to bitcoin in January [2021], “Ahuja said on” Squawk Alley, “just days after its company announced that it had bought more of the largest cryptocurrency in the world with money on the fintech company ‘s balance sheet.
Cash App is Square’s peer-to-peer payment platform, which allows users to buy and sell assets such as bitcoin and stocks.
January’s spike in bitcoin interest among Cash App users coincided with an upside-down move in the digital coin last month. On January 1, bitcoin was trading below $ 30,000 per unit. It hit $ 40,000 apiece for the first time about a week later, although it returned in value mostly in the second half of January.
Bitcoin raised $ 58,000 for full-time Sunday after making its debut above $ 50,000 last week. Even with Wednesday’s hard gains, a big sellout earlier this week, it brought bitcoin below $ 50,000. However, Bitcoin is still up over 70% year to date and over 400% in the last 12 months.
Square began allowing almost all of its users to buy and sell bitcoin through its payment app in January 2018, following a more limited distribution in the previous fall. The first entry into the crypto market came as bitcoin was in the midst of a sharp rise in 2017, hitting what was then at a high of nearly $ 20,000 that December. Then came a major backlash throughout 2018 in what has been dubbed the “crypto winter,” when bitcoin lost 80% of its value.
But in 2020, bitcoin began a major rally as several high-profile investors visited the digital token as a strong hedge of inflation and established companies like PayPal moved in.
Square itself bought $ 50 million worth of bitcoin in October using money already on its balance sheet. On Tuesday, the Jack Dorsey-led company announced that it had purchased an additional $ 170 million worth of bitcoin. Both bitcoin purchases account for about 5% of the company’s cash assets, Ahuja told CNBC.
Square’s bitcoin holdings – 8,027 coins in total – were worth about $ 400 million based on Wednesday’s price. Dorsey, one of bitcoin’s most famous supporters, once claimed that it was going to be a “single currency” on the internet. He also runs Twitter.
“We feel that bitcoin is in line with our purpose, which is economic power,” said Ahuja, explaining Square investments. “Economic empowerment is about accessing wider financial instruments, including people who haven’t had it before. We believe bitcoin is a way that could do that in the future. . “
Crypto bulls have likened bitcoin to “digital gold,” saying that with its supply limited at 21 million units, it can be a valuable source of value. There are about 18.64 million bitcoins in circulation right now, according to Coindesk. New bitcoins are entering the market as a reward for so-called miners, who use high-powered computers to authenticate transactions across the decentralized network.
Other companies that have recently moved into crypto include Tesla, which announced earlier this month that it had bought $ 1.5 billion worth of bitcoin. Bank of New York Mellon, the oldest bank in the U.S., said on Feb. 11 that it plans to launch a digital asset division later this year.
Square, which has risen over 200% in the past 12 months, fell more than 6% Wednesday to about $ 240 per share.