Bitcoin on the long term to be the global reserve currency, the Square founder and CEO Jack Dorsey said already in the year 2018. For this scenario, the payment service provider Square has now, apparently, the Soft, and has recently bought as a surprise in a big way Bitcoins. Why are increasingly large companies in the young crypto-market squint.
In the crisis year of 2020 the world of digital currencies grow. Not the least of PayPal’s new crypto service is the latest example of how the entry in the crypto-world to the masses is made. It is a break prevails in the market. Even with competitors such as Robinhood Markets, or Square, Inc. the trading of Bitcoin and co. is no longer possible. The latter is the second company of the Twitter co-founder Jack Dorsey, who founded the mobile payment service in 2009, after he had temporarily been at Twitter are forced out. He is the largest shareholder with a share of 24.4 percent. The San Francisco-based company sells reading devices for Smartphones and Tablets with which merchant card payments on mobile devices can accept. Now Square around 4.709 Bitcoins has purchased a total value of about US $ 50 million, reads a press release of the company. Thus, the Payment agent accepts, according to the company, MicroStrategy in terms of Bitcoin a pioneering role.
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The step, the company explained that it is up to the potential of the Bitcoins faith, to grow in the future: “in light of the rapid Evolution of crypto-currencies and the unprecedented uncertainty of macroeconomic and monetary conditions, we believe that it is the right time for us to expand our for the most part in US dollars specified Balance Sheet and to make a major Bitcoin Investment”, – stated in the message. 50 million US-Dollar Investment is definitely not a small volume for the payment service provider. Even if Square, is now a turnover of 5.8 billion U.S. dollars. The value would be equivalent to around 1 per cent of the balance sheet total, which had shown Square to the end of the second quarter. However, Square “believe that the Bitcoin has, in the future, the potential of a ubiquitous currency,” says Square chief financial officer Amrita Ahuja. The growing acceptance of the digital currency it wants to participate in instrumental and learn from it.
In addition, it is considered Bitcoin at Square as “an Instrument to strengthen the economic independence” that allows people around the world participating in a global currency system. This would be consistent with the purpose of the Square as a company is to meet.
Square is a very innovative company and Bitcoin belongs to a new infrastructure, which represents a clear growth market. That Square is now investing itself in the Bitcoin, may have other, more speculative reasons. Nevertheless, the General acceptance for the edge areas and other currencies is a potentially valuable step in the direction of further growth. Ultimately, Square can benefit from each transaction that is processed. Accordingly, it makes sense to rely on young markets, the potentially a lot of further growth potential can have. As the current reserve currency under the crypto currencies, Bitcoin has a great potential in terms of transaction volume. This can have a positive impact on the operational business of the Square.
Crypto is the only area of the Square is facing open-minded are not currencies, however. The company supports the Cannabis industry, which could also lead to a huge growth in transaction volume. To rely on young, high-growth markets could, therefore, be an overall smart move.
Square’s Cash App allows Bitcoin purchase
For the confessing crypto-Fan Jack Dorsey and his company, it is far from the first foray into the world of digital currencies. The Peer-to-Peer-App “Cash” users can buy in the US to 2018 Bitcoins, hold, and sell. In addition to Square supports in the area of crypto-currencies since 2019 with an independent Team of Open-Source projects to the development of the Bitcoin network. In September the payment was a mediator also the establishment of the “Crypto Open Patent Alliance” (COPA) is known, a non-profit consortium for the protection of the Open-Source nature of crypto-currencies, which combines the patents of the individual members and provides for this in an encrypted database.
Photo: Peer-to-Peer App Cash with the US-American users since 2018 Bitcoins can buy and sell.
A protective shield in front of crypto patents?
The offer of the Crypto Open Patent Alliance is likely to sound, especially for small companies or crypto Start-ups are tempting. Larger companies that already have many patents of its own, it is likely, however, enjoy fewer benefits. Therefore, the question arises: What Square is this? The payment service provider may have its non-profit project for quite a few ulterior motives. It is speculated that the company might have noticed that it is not a scalable product with a high throughput could build without stumbling over an Innovation protected by a Patent. Therefore, the Square hope now may be that companies will join the Crypto Open Patent Alliance, the patents might be for you useful. If this really should occur, it will show.
The speculative Top Pick
The share of Square has in the last few months, a fantastic run Since the start of the crisis-low in March has increased five-fold, the price is more than and the 13.October marked at 190 US dollars, a new all-time high. Although she could not maintain this level first and had to give up in a week over the course of a 7.5 percent of the profits. Nevertheless, the upward movement is continuing since Friday, slowly. The rate jumps to around 2.4 percent and marked currently 176,77 US Dollar.
Square-share performs better than the market
Overall, the Square-share has achieved in the calendar year 2020, a return of 238%. The share thus outperformed the technology Index NASDAQ, which could, after all, also increase by 47 percent (as of 31.12.2020), significantly. In addition to the strong chart picture and underlying growth trends of the “Überperformers” votes, the openness for new technologies such as the Bitcoin, and the potential for a global Expansion in the long term optimistic. Finally, Square bought, not least, some of the smaller Start-up companies. Including the web hosting company Weebly in San Francisco, the purchase of the 2018 is for example. Investors remain therefore with outlined target and stop, and new entrants can gain access to weaker days.
Pro/Contra Square Inc. Share (WKN: A143D6)
|The talks for an Investment||The talks, however,|
|Focuses on young, high-growth markets like Bitcoin and the Cannabis industry||Lack of sales strong international business|
|Potential for global Expansion||Higher credit risk than in the case of Visa|
|Smart Investments in young, high-growth markets strengthens competitiveness||The share with a p / e ratio of just under 80 cheap|
This article first appeared in issue 11/2020 of the crypto compass, the first market letter for digital Assets. The price data were as of 31. December 2020 updated.