What Square’s $50 Million Bitcoin Investment Means for You
What would you do with $50 million?
You may not have an immediate answer … but it would sure be fun to figure out.
One well-known company is getting to do just that, and it made news this past week with what it decided to do its $50 million chunk of change.
It’s probably not what you would expect, but the move highlights something that every investor needs to know about.
Let me explain …
With all the headlines about the election and the crazy events of 2020, it’s easy to miss significant stories about other important topics … like making money.
This past week, online payment company Square (NYSE:SQ) was at the center of one such story. Remember, this company was started by Jack Dorsey, who also started Twitter (NYSE:TWTR), so it’s safe to say he is a visionary.
Square recently purchased $50 million worth of bitcoin. But that’s just part of a larger investment in cryptocurrencies.
For those of us who have followed the industry for a while, it’s not a major surprise. Dorsey has long been a fan of bitcoin, and Square started accepting bitcoin payments way back in 2014. Its Cash App began allowing bitcoin purchases in 2018.
Other mobile payment companies are also hot on the trail. According to reports, PayPal (NASDAQ:PYPL) and Venmo plan to allow users to buy and sell cryptos directly from both websites. PayPal already has a deal with Coinbase where money can be sent to and from the crypto exchange, but a move to directly offer cryptos via PayPal and Venmo would be big.
In its statement, Square said that bitcoin is “an instrument of economic empowerment and provides a way for the world to participate in a global monetary system …”
Going back a couple of years, Jack Dorsey said he sees bitcoin “as a transformational technology for our industry and we want to learn as quickly as possible.”
That advice is as valuable today as it was when he said it in 2018.
The way you buy everyday goods and services … buy a home … pay your taxes … even how we vote in the future.
This transformation is underway, and the truly seismic shift — when the massive profits are made — comes as businesses, consumers, and big-money investors realize what’s going on.
We all know cryptocurrencies can be volatile, but if you invest for long-term hypergrowth, you can ride through the day-to-day volatility. Still, bitcoin’s trading action is flashing a very bullish signal right now as its 30-day historic volatility nears an important level.
According to investor Raoul Pal, volatility has dipped to 20% only seven times in the past. In six of those instances, the price shot higher as volatility also spiked.
Odds are that the next big move for bitcoin and the entire crypto universe will be higher.
This is further confirmed by bitcoin’s longest stretch ever above $10,000.
Take a look at the chart below and you can see how bitcoin peaked around $10,000 several times in the first seven months of the year. It broke through that resistance level with gusto in late July and has stayed above ever since.
Bitcoin’s consolidation above $10,000 is extremely bullish over the long term, and it appears that a huge move higher is on the horizon. This is just one more catalyst to send bitcoin to its highest level in over a year.
If and when this occurs, the best altcoins — cryptocurrencies other than bitcoin — should also explode higher and even outperform bitcoin.