By Shariq Khan
(Reuters) – Square Inc raised the bets on bitcoin by investing $170 million more and Chief Executive Jack Dorsey promised on Tuesday to “double down” on the payment firm’s commitment to the world’s biggest cryptocurrency.
“By us owning bitcoin, our incentives are aligned with skin in the game,” Dorsey said on a post-earnings conference call with analysts.
Square has been involved with the currency for years and its Cash App, a payments service, has allowed users to trade it since 2018.
In October last year, Square bought about 4,709 bitcoins at an aggregate price of $50 million. Since then, the coin’s price has scaled record highs, with Tesla Inc investing $1.5 billion and Bank of NY Mellon Corp saying it will set up a unit to help its clients deal in digital assets.
In its latest purchase, Square paid more than $51,200 per bitcoin, according to Reuters calculations. However, the spot price of the currency on Tuesday crashed more than 13% to below $47,000 amid a broader market downturn.
Shares of the company fell about 5% after the bell on Tuesday, extending losses booked during the session.
Square’s revenue in the quarter more than doubled to $3.16 billion, which the company said was helped by bitcoin purchases on Cash App.
Square’s gross profit on bitcoin trading rose 13 times in the fourth quarter, but it was still just 2% of its revenue from the cryptocurrency. Its bitcoin holdings are now worth about 5% of its $4.4 billion cash pile.
The company posted adjusted earnings of 32 cents per share, beating market expectation of 24 cents.
(Reporting by Niket Nishant and Shariq Khan in Bengaluru; Editing by Maju Samuel and Arun Koyyur)