Gemini CEO Tyler Winklevoss says Square Inc.’s massive Bitcoin purchase is merely the beginning of an influx of institutional investments into the leading cryptocurrency.
On Thursday, San Francisco-based financial services company Square Inc. announced that it had acquired approximately $50,000,000 worth of BTC.
The sizable investment comes in the wake of business intelligence firm MicroStrategy’s $425,000,000 bet on Bitcoin as a profitable alternative to holding cash assets.
Tyler Winklevoss, the co-founder and CEO of crypto-exchange Gemini and staunch Bitcoin advocate, tells his Twitter followers that these large BTC purchases are just the first drops in a tidal wave of institutional investments that are coming to the Bitcoin space.
“First, it was Michael Saylor and publicly traded MicroStrategy buying $425 million of Bitcoin. Today, it is Jack Dorsey and Square buying $50 million of Bitcoin. Tomorrow, it will be another visionary leader, and another, and another… the tsunami is coming.”
Meltem Demirors, the chief strategy officer at the digital investment firm CoinShares, says the investment highlights Bitcoin’s evolution as a viable and regulated institutional asset.
“Bitcoin is a highly liquid asset that trades 24/7 in an increasingly regulated and structured global market – and it’s an effective portfolio diversifier! Square’s willingness to hold bitcoin on its balance sheet as a treasury asset speaks to:
(1) the changing landscape that treasurers must navigate, and;
(2) their ability to manage the operational, risk, and compliance requirements of holding bitcoin directly.”
In addition to its public announcement, the team at Square also released a document detailing exactly how they purchased roughly 4,709 BTC in compliance with US regulations. The move is designed to help guide other companies interested in making similarly sized purchases.
“To maintain transaction privacy and price slippage on execution, Treasury purchased the Bitcoin over-the-counter with a Bitcoin liquidity provider that we currently use as part of Cash App’s Bitcoin trading product. We negotiated a spread on top of a public Bitcoin index and executed trades using a Time-Weighted Average Price (TWAP) over a predetermined 24-hour period with low expected price volatility and high market liquidity, in order to reduce risks associated with cost and pricing.
Criteria that we evaluated when selecting our liquidity providers included pricing, annual trade desk volume, and integrations with our existing trading and settlement rails. Popular over-the-counter desks, some of which we’ve utilized in the past, can be found here.”