Square, a financial firm giant in the United States, has invested $50 million in cryptocurrency as it foresees the importance of cryptocurrency in the financial world in 10 years.
Square, Inc. has invested $50 million in cryptocurrency, purchasing around 4000 worth of bitcoins, making cryptocurrency 1% of its total revenue. While financial experts seem to agree that this is an unusual move for a financial firm, Square, Inc. stands firm in its perspective that cryptocurrency will play a large role in the global currency in the future. Square, Inc. also affirms that this move is part of a bigger strategy in its vision and mission.
How relevant can cryptocurrency be in the future?
- All about Square, Inc.
Square, Inc. is an American-based financial firm that is primarily located in San Francisco, California. It is considered one of the United States’ financial giants that offers a plethora of financial activities such as being a merchant service aggregator and a mobile payment company. It was first founded in 2009 by Jack Dorsey and Jim McKelvey, and it subsequently launched its app in 2010. It has been a hot commodity trading item in the New York Stock Exchange since November 2015 with its signature symbol, SQ.
Square was founded primarily because of McKelvey’s difficulty to purchase $2000 worth of glass faucets and fittings because the receiving company did not accept credit cards. Dorsey, who is also the co-founder of the social media giant, Twitter, began developing Square as a side business in his home office in St. Louis. They thought of the company name, Square, because of its signature square readers. Their primary hardware market was the Square reader, who quickly transformed into a plethora of other hardware and software activities such as the issuance of virtual gift cards, financing merchant services, an online booking tool, Square Payroll for small companies, application programming interface, and launching the Square Cash App which allows hassle-free money transfers between people via the app or the website.
- Cryptocurrency: The Future of Global Currency?
The price of digital currency has increased from $7000 to over $10,000 in January 2020, though investments dropped in March 2020 because of the pandemic. Square, Inc.’s CEO, Jack Dorsey, is a big advocate of cryptocurrency as he believes that this type of currency will be the ONLY currency in the world, albeit it will probably take around a decade before this happens.
Cryptocurrency, like Bitcoin, however, is perceived by financial experts as “digital gold” as compared to being the currency of the future, primarily because of the high transaction cost that is one of the major reasons why people are hesitant to use this as a day-to-day mode of payment. According to technology expert Chamath Palihapitiya, Square Inc.’s strategic move to invest in Bitcoin becomes a buffer or support for its revenue as these types of currency should only be invested upon as a last resort to pull when everything comes tumbling down. Nonetheless, cryptocurrency still provides that financial buffer for a strong financing corporation like Square, Inc.