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Bitcoin

Square Buys $170 Million Worth of Bitcoins (squareup.com) 157

Posted by msmash from the how-about-that dept.
Square said today it has purchased approximately 3,318 bitcoins at an aggregate purchase price of $170 million. From a statement: Combined with Square's previous purchase of $50 million in bitcoin, this represents approximately five percent of Square's total cash, cash equivalents and marketable securities as of December 31, 2020.
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Square Buys $170 Million Worth of Bitcoins More

Square Buys $170 Million Worth of Bitcoins

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  • Buy high, sell low... (Score:5, Funny)

    by BlackBilly ( 7624958 ) on Tuesday February 23, 2021 @04:33PM (#61093754)
    List of companies not to invest in:
    Tesla
    Square

    • Re: (Score:2)

      by PCM2 ( 4486 )

      Funny, but do you know how rich you would be if you invested in Tesla?

      • Re: (Score:3, Insightful)

        by Train0987 ( 1059246 )

        If they invested last week they would've lost 25% of their money.

        • Not true (Score:2, Insightful)

          by SuperKendall ( 25149 )

          If they invested last week they would've lost 25% of their money.

          Only if they sold... which would be exceptionally stupid. The market seems to have forgotten that Tesla has the best solar roof system on the market today, paired with the best whole-house battery backup system... which seems especially pertinent given what happened in Texas just recently.

          Well, that is to say the market had forgotten... someone remembered because Tesla is already on the way back up after hours, big time.

          • Don't forget that with a 5% or larger drop, it tends to set off "Stop Loss" orders from being added to the Ask list.

            • Re: (Score:3)

              by Rei ( 128717 )

              Stop-loss orders are a great way to lose money. Locks in a low price.

              • "low" is relative. From a different perspective it could be a great way to lock in most of your gains and also benefit if the price continues to rise.

                • Re: (Score:2)

                  by Rei ( 128717 )

                  I always take the view of, pick a stock with no trend, fluctuating around a mean, and picture whether your strategy will tend to gain you or lose you money in such a scenario. You buy at an arbitrary price on the spectrum, so it'll average around the mean. You set the stop loss to somewhere lower than that, so lower than the mean. If it goes off, and you eventually buy back in, you cannot count on your buy-in price being lower; it might be, or the stop-loss might just be the bottom of a temporary dip; you

              • I learned this the hard way with TSLA. Wiped out my investment near the bottom. I haven't used stop loss since.

          • someone remembered because Tesla is already on the way back up after hours, big time.

            LOL...being up 1.87% after hours following a loss of 2.19% for the day is not up big time. It's down. Might it go up tomorrow? Maybe. But today it's down. Even after hours. It's currently not even as high as the highest value it had during normal trading hours today. There's nothing big time about that.

            • You're making a short-term argument as a rationale to not make a long-term investment in these companies. This argument's been happening on Slashdot for a couple of years now. Tesla and Square have been killing it the past couple of years and they're companies that have brand recognition. Arguing against them as long-term plays doesn't make sense.

          • Only if they sold... which would be exceptionally stupid.

            Why do you think the price dropped. People sold.

            Tesla makes solar panels, whoop de fucking do. They are insanely overvalued as a company regardless.

            Also I contest their "best" whole house battery backup system. They have a popular in the USA whole house battery backup system. There are a couple of players on the market offering what Tesla offers in that space, some of which warranty their product for longer than Tesla, and worth remembering that Tesla's battery backup system is not heated, and neither are p

        • Re: (Score:2, Insightful)

          by Rei ( 128717 )

          After how much gain, exactly?

          Let's just say that I don't exactly have any sleepless nights about my decision to invest in the company in 2018. Largely thanks to the terrible (but shouted from the rooftops) arguments of the $TSLAQ bears, including here on this website. Before I was merely a fan of the company and its products. But after realizing how divorced from reality the company's doubters were, it got me to start looking more into the company from an investment standpoint.

          And FYI, unless you're in a r

          • Re: (Score:3)

            by Rei ( 128717 )

            I'll add that - this said - I'm very much not happy with their decision to start gambling in cryptocurrencies. Maybe it's a great ad to get crypto holders to buy Teslas, fine. Maybe they already sold off part or all of the stake for a profit. Who knows. But I personally want nothing to do with them.

          • And FYI, unless you're in a rush to sell, dips are extremely useful.

            This is the key point. Dips are short term - if you believe the company has a strong long-term outlook. Every stock dips short term. I'm pretty sure Tesla's rise over the past 3 years speaks for itself as to its outlook.

      • Funny, but do you know how rich you would be if you invested in Tesla?

        You mean if I bought low and sold high? That would be the opposite of buying high and selling low wouldn't it?

    • Re:Buy high, sell low... (Score:5, Insightful)

      by Xylantiel ( 177496 ) on Tuesday February 23, 2021 @05:50PM (#61093964)
      If buying bitcoin is on the list of ideas they are putting cash into, they're already intellectually bankrupt. Square is a payment services company. A sane use of this investment capital would be in something like enabling their clients to clear payments using one of the stablecoins rather than feeding the bitcoin pyramid scheme by buying bitcoins. Bitcoins are currently the picture of uselessness in terms of a medium of exchange. Volatile, expensive, slow (expensive) transactions, doing real damage to the market for video hardware and energy markets.

      • "enabling their clients to clear payments using one of the stablecoins rather than feeding the bitcoin pyramid scheme by buying bitcoins."

        If your clients are coming in and going out with bitcoin then at some point you need to clear those transactions in bitcoin no matter what else you do with them, which in turn means you need to have enough bitcoin on hand to cover the difference. At that point you can then handle any exchanges on an internal ledger and avoid further cost on bitcoin transactions.

  • which companies get boned in the crash? (Score:4, Insightful)

    by hdyoung ( 5182939 ) on Tuesday February 23, 2021 @04:35PM (#61093758)
    Which companies will be left holding the bag when the price crashes? Tesla, Square, or some other company? The later that the company makes the buy, the more likely they will be holding when the price comes back down to reality.

    Maybe I'm wrong and Bitcoin is here to stay as a currency, but I wouldn't bet on it. The companies probably aren't wither. Much more likely, they are trying to cash in on the speculative frenzy and make a quick buck. Some will do well, but most will probably get boned hard.

    This is an indication that these companies (Square, Tesla) don't have anything better to do with their money. In the broad view, that's not a healthy indicator.
    • more likely it'll be Joe Schmoe investor trying to get in on the hot market.

      Bitcoin won't make it as a currency. It might make it as Company Script for 2021. There's been talk of the existing players, who are tiny compared to even a small hedge fund, manipulating the price of BT in the market. Imagine if a Goldman Sachs or what have you decided they were going to do run of the mill currency manipulation on the price of BT....

      As for why would they do it? Well, imagine you get paid in BT, you buy your

    • Re:which companies get boned in the crash? (Score:5, Interesting)

      by Frank Burly ( 4247955 ) on Tuesday February 23, 2021 @04:53PM (#61093804)
      Tesla can convert solar capacity to money via a cryptocurrency, so it seems like a natural step. With Square it may be a hedge because if I can pay you a dollar by transferring BTC then I don't need a payment processor.

    • Re:which companies get boned in the crash? (Score:4, Informative)

      by misexistentialist ( 1537887 ) on Tuesday February 23, 2021 @04:58PM (#61093818)
      what about companies holding USD at a negative rate due to the frenzy of money printing? A new dollar could be even be introduced at any time, what are people going to do, march on the Capitol?

      • It's like you never even heard of the Federal Reserve, world bank and other organs to stabilize currencies that are the whole reasons fiat currencies are relatively stable and BTC is not. (Not saying those are not evil too.)

        • Re: (Score:3, Insightful)

          by SuperKendall ( 25149 )

          It's like you never even heard of the Federal Reserve, world bank and other organs to stabilize currencies that are the whole reasons fiat currencies are relatively stable

          It's pretty hilarious you would describe what the Federal Reserve is doing as making fiat currencies stable, when they have in fact destroyed the viability of the U.S. dollar long term.

          • Only because they gutted the interest rate and are way to slow to lift it back up. If personal savings accounts had interest rates that beat inflation the 60% of the stock market would exit. People are pouring money into stocks as yay is the only viable way to earn money.

            • Stocks are a better investment if you look at overall long-term valuation versus inflation. You just need to be willing to accept risk.
        • Even if the Fed is competent enough to keep USD stable, they only have so many levers to pull. There is theoretically a federal and state spending level which makes it literally impossible for the Fed to stabilize the dollar. Actually, it isn't theoretically at all; we've seen it happen to other currencies. In recent history. And there was no world bank or any other organization which could save those currencies.

          If you think USD is too big or too important to fail, you're wrong. The United States is not

      • Re: (Score:2)

        by ceoyoyo ( 59147 )

        You always lose money holding currency. That's the great power of fiat currency: it allows the government/reserve system/whoever to impose a couple percent tax on sitting on your money Scrooge McDuck style. It's why the gold standard, and bitcoin, are terrible ideas for actual large scale currencies.

        That couple percent tax on dolla dolla bills is why no company keeps any significant number of them around.

        • "Ahh. It's not a liquid. It's a great many pieces of solid matter that form a hard floor-like surface"

          In more serious matters, I wonder how companies get away with keeping such large reserves nowadays. I mean, it's not quite scrooge-mcduck, but isn't a lot of it in fairly liquid forms?

          • Re: (Score:2)

            by ceoyoyo ( 59147 )

            The operating reserve is typically quite a bit smaller than the billions you hear about, and typically you keep as much of it as you can in a form that's liquid but still offers some interest to offset inflation losses. Bonds from big governments for example, US Treasury bills being a favourite.

    • Re: (Score:2)

      by Ecuador ( 740021 )

      Maybe I'm wrong and Bitcoin is here to stay as a currency, but I wouldn't bet on it.

      Bitcoin no, its power requirements as a transactional system are ludicrous. But other crypto, that can actually be used for transactions without pushing for the quick thermodynamic death of the universe (e.g. Etherium 2.0), why not. I would not bet on when Bitcoin will deflate, as I am not a betting man. If I was a betting man, I'd have acquired bitcoin a long time ago and I'd perhaps still be trying to hype it to pump its price even more to get out at the max possible gain... :)

      • Re: (Score:2)

        by ceoyoyo ( 59147 )

        I expect proof of stake is going to absolutely take over. Not because it's actually practical, but because big financial institutions are familiar with how proof of stake works. And after all, if you're a big financial institution (i.e. a big stake) why would you want to have to continually bleed money to maintain control?

    • Maybe I'm wrong and Bitcoin is here to stay as a currency, but I wouldn't bet on it.

      I'm all for regulating it out of existence in the name of stopping the stupid fucking pointless waste of energy at a time when we shouldn't be wasting energy that it is.

      I lost a lot of respect for Tesla and Musk a few weeks ago. I'm losing a lot for Square now. But I don't give a shit about Square. Tesla on the other hand... that one hurt.

    • Elon Musk knows damn well that when he tweets about anything it has an impact on commodity prices. This looks 100% like gaming the system because no one with any vague financial sense thinks bitcoin is a legitimate long term option. They're buying up a bunch, assuming it will pump due to the publicity and then putting in their stop sell prices to avoid losses. I would stop short of calling it pump and dump because they don't need to sell if the price keeps sky-rocketing. It's an educated gamble, with the kn

  • Short term, hot damn we are headed towards one hell of a crash.

    • People have been falsely predicting Bitcoin crashes almost as much as falsely predicting the end of the world.
      Not saying it won't happen, saying so far all predictions were wrong.

      • It already crashed, many times.

        You just declare it "not a crash", because the next wave (including crash) is even bigger.

        You are lost. Because you'd have to admit being a moron to ever get out before big companies pump and dump on you and kill you. But nobody can admit that. Not even to themselves.

        So keep on Ponziing. The money from all the morons will end up in one big business (like Amazon) or the world will outright ban it. In any case, you'll be out of all your real money and home and everything. And I'

        • It already crashed, many times.

          And it already recovered, just as many times, each time becoming more valuable than the last peak, before the "crash". Also, unlike stock market crashes, an abrupt dip in cryptocurrency value doesn't "wipe out" money, except in case of those who buy high and sell low. Those are the kind of people who would lose money just as well through any kind of investment, aka stupid people.

          Think about it like this: a random person who would have decided to buy bitcoin instead of an iPhone at any time prior to 2019 wou

          • And it already recovered, just as many times, each time becoming more valuable than the last peak, before the "crash". Also, unlike stock market crashes, an abrupt dip in cryptocurrency value doesn't "wipe out" money, except in case of those who buy high and sell low. Those are the kind of people who would lose money just as well through any kind of investment, aka stupid people.

            That's not a guarantee that it will recover the next time.

            And what do you mean a bitcoin crash doesn't wipe out money? One moment you have $100k worth of bitcon and the next, $10k. Obviously it's not realized loss until you sell it but it's exactly the same as with stocks.

            • The difference between a company's stock and cryptocurrencies is that cryptocurrencies can't declare bankruptcy and give you the shaft, as long as enough people are interested in using them (mining, trading, whatever). Sure, if you are naive enough to fall for some scammy shitcoin, you will get the shaft. But top 10 crypto, for example, are just as (if not more) resilient as top 10 company stock.

              "One moment you have $100k worth of bitcon and the next, $10k" - only if you insist on doing the conversion all t

      • People have also correctly predicted the crash. But man if I had $0.10 of actual USD for every time I heard someone say bitcoin will be worth $100000 by the end of last year, or by the end of the Hong Kong protest, or by the end of ${anti-governemnt_rant} I'd be able to afford a few bitcoin right now.

        • Re: (Score:2)

          by ceoyoyo ( 59147 )

          Lol. There happens to be one immediately below your post currently.

        • People have also correctly predicted the crash. But man if I had $0.10 of actual USD for every time I heard someone say bitcoin will be worth $100000 by the end of last year, or by the end of the Hong Kong protest, or by the end of ${anti-governemnt_rant} I'd be able to afford a few bitcoin right now.

          This statement goes both ways. Look:

          But man if I had BTC0.01 for every time I heard someone say bitcoin will crash and never recover by the end of last year, or by the end of the Hong Kong protest, or by the end of ${anti-governemnt_rant} I'd be a very rich person right now.

          See? Just a few words changed, and it's as truthful as the other statement.
          Point is, both sides were wrong, however the side predicting it would rise (again) won all the times so far. Maybe they will eventually be wrong, however I don't see that happening any time soon.

          • This statement goes both ways. Look:

            Your statement is stupid on the face of it. Bitcoin has crashed on multiple occasions and on even more such occasions didn't recover. You can do that by reading a simple graph.

            I'm beginning to think you don't actually understand what a crash is. But hey, that we can fix: https://www.investopedia.com/t... [investopedia.com]

      • BTC has dropped 20% since last week.

        • So? It did that several times in the past, then recovered and surged above its previous peak, sometimes almost 5 times as much.
          A crash is not a dip and comeback, it's something unrecoverable. So far it still didn't happen.

  • Look for Oracle to announce in the coming weeks. BTC will hit 100K by years end and no, it isn't going anywhere.

  • Smart move (Score:2, Insightful)

    by erp_consultant ( 2614861 )

    Speculative swings aside, it is smart for them to store cash holdings in bitcoin. At the rate our government is printing money (not just Biden, Trump did it too) the value of the dollar can only go down. Bitcoin, otoh, has a finite amount so increased demand will cause the value to rise over time. Sure it's going to have wild swings along the way but it will trend upwards.

    The currency debasement, coupled with near zero interest rates, will drive more companies to move large cash holdings to bitcoin.

    • Since the demand in the latest BTC bubble is caused in part by all the QE and stimulus going on, it's not going to be immune from the pop. (Neither are stocks for that matter, but they're backed by more than Bitcoins are.) Even if BTC sticks around for years and slowly trends upward from interbubble nadirs, the time to buy it would be in those nadirs, not at the height of the bubble.

      Worst-case, shit-your-pants unprecedented scenario is that the dollar falls by 20% in a couple of years. BTC is likely to fall

    • At the rate our government is printing money

      What is the value of this rate?

    • The day it becomes more expensive to mine the next bitcoin than it is worth is coming, on that day no more transactions are possible ... unless people are paid to mine bitcoin - everybody will sell ...

  • The red supergiant phase.

    Aaaany minute now ... Aaaany minute now, it's gonna collapse into a black hole. :D

    I hope y'all have ordered your popcorn! :)

  • Square (of course) have their own cryptocurrency, Stellar. Looks like it has dropped almost 20% in the last 24 hours, although been on a decline for the last couple of days (Square staff dumping before this news broke?).

    Be interesting to see what they announce for Stellar next.

    • Re: (Score:3)

      by tepples ( 727027 )

      I'm surprised Square hasn't partnered with Square Enix to introduce the "Gil" currency by now.

      • Re: (Score:2)

        by Ambvai ( 1106941 )

        Might not be a bad idea. The first FF came out in 1987, and with the exception of the MMO that has a different mechanic, has been fairly stable in price since then, according to the FF wiki [fandom.com].

  • Becoming bitcoin investment vehicle? (Score:3)

    by misnohmer ( 1636461 ) on Wednesday February 24, 2021 @03:17AM (#61094870)

    I cannot see why a company would sign any large chunk of its value investing in bitcoin. How does it help their investors? If the investors want to invest in bitcoin, they can just buy bitcoin themselves - what is the benefit in buying a stock of a company who own bitcoin instead? Why would I want to buy Tesla stock if some percentage of their valuation is tied dirctly to bitcoin? I can just invest the same percentage in bitcoin directly, or is there some barrier to entry which doesn not allow investors to buy bitcoins but it does allow them to buy stock of companies who own bitcoins? What am I missing, other than some CEO thinking bitcoin gains will float the company value because the company itself cannot make as much money.

    • Its simple. The companies are hedging against USD money printing machine. USD is a terrible asset to hold if you are looking out 10, 20 years. Period. If you want to hear this direct from these companies mouths - Michael Saylor (MicroStrategy) has posted many videos online explaining why.

      • Its simple. The companies are hedging against USD money printing machine. USD is a terrible asset to hold if you are looking out 10, 20 years. Period. If you want to hear this direct from these companies mouths - Michael Saylor (MicroStrategy) has posted many videos online explaining why.

        Unlike bitcoin, which was like 10% of its current value... last year? Yep that's the kind of volatility I'd want.

        Jesus the world is run by idiots.

        • Unlike bitcoin, which was like 10% of its current value... last year? Yep that's the kind of volatility I'd want.

          Jesus the world is run by idiots.

          So instead of volatility you prefer a stable but declining currency.

          I mean, that's one strategy. I wouldn't call it a very smart strategy, so you should perhaps look inward before calling other people idiots.

          Holding non-USD currencies used to be risky. That was when the USD was strong and looked like it would dominate forever. Today it's actually more risky to not hold USD alternatives -- even if those other currencies are volatile. And yes, that risk profile applies the same to all asset-holders, be

          • So instead of volatility you prefer a stable but declining currency.

            Yes, absolutely. I'd rather know the value could go down 10% in 10 years than 20% in 1 day.

            Besides, the premise is somewhat questionable. USD is up vs EUR over 10 years and CNY is hardly a metric because of all the fuckery CCP is pulling with it.

            Of course the real answer is to not hoard cash because that's dumb.

            Holding non-USD currencies used to be risky. That was when the USD was strong and looked like it would dominate forever. Today it's actually more risky to not hold USD alternatives -- even if those other currencies are volatile. And yes, that risk profile applies the same to all asset-holders, be they individuals or corporations; there's no difference. That's why companies are buying Bitcoin.

            It doesn't matter if you wish the current environment or future outlook was different, all indications say that the USD will continue to decline against the Yuan and yes certainly Bitcoin as well. Wishing we could all stay in the good old days of the strong Dollar won't change this reality. The writing on the wall couldn't be more clear: the United States has chosen a path of decline. All we can hope at this point is that the decline is gradual and not a complete crash of the USD. Either way, if you stubbornly persist in only holding your cash in USD, your individual wealth will also decline against those who diversify. It's that simple. If you've finished reading this, you also can't say you weren't warned at least once.

            Companies (i.e. Tesla and this one) mainly seem to be buying coins because their CEOs are morons who think they're genius and are happy to gamble the companies on it.

            I'm not sure why you think I care

      • Why not buy gold or property or other commodity with at least some intrinsic value? Buying into something like bitcoin, which is highly volatile, is like saying they bought a bunch of lottery tickets to preserve the value of their cash. Of course, by buying $1.5B of bitcoin, Tesla did push up the price of bitcoin, so perhaps it looks great on their books (as long as they hold), but that's just playing with hype based speculation.

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