The Cryptocurrency Informer
Square Hordes BTC; Coinbase Getting (A)Political; Extended Tax Deadline Looms Ominously
This week, Square Invests $50 million into Bitcoin, Coinbase is losing employees because they don’t want to get political, and the extended tax deadline is less than a week away!
More information on each of these topics can be found below.
October 9th, 2020: Square Hordes BTC; Coinbase Getting (A)Political; Extended Tax Deadline Looms Ominously
(00:28) On Wednesday this week, Square Inc purchased 50 million dollars worth of Bitcoin, or around 4709 BTC. For those unfamiliar, Square is the company started by Jack Dorsey, who is also the CEO of Twitter. Square is responsible for a number of financial products and services, including Cash App. Dorsey is a vocal advocate of cryptocurrency, which Wednesday’s gigantic purchase of Bitcoin is certainly illustrative of.
On Twitter, Dorsey said “More important than Square investing $50mm in Bitcoin is sharing how we did it (so others can do the same)… And FAR more important than that is us investing directly in open source development, opening access to patents with COPA, and making bitcoin more accessible and useful to millions of people with Cash App.”
Square INC released a whitepaper to provide details about HOW and WHY they purchased the $50 million in Bitcoin:
“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”
The whitepaper states that the Bitcoin is held in their proprietary cold storage aptly named “SubZero”, which is also used to protect the Bitcoin of CashApp users, and protected by “a Crime insurance policy to protect against internal or external theft of bitcoin both in hot wallet and cold storage.”
As for why the company decided to invest in Bitcoin: “We view bitcoin as an instrument of global economic empowerment; it is a way for individuals around the world to participate in a global monetary system and secure their own financial future.”
Opinions of this investment are generally pretty positive – most people in the crypto space concede this is a good move for the future of crypto. More and more companies are investing in crypto in a big way – see the Microstrategy investments in August, for example. Of course, there are those outside the space that can spin even news like this into something negative. Some critics asked why news of such an investment, or the investment itself, hasn’t pushed the price of BTC up much higher. However, as of recording, Bitcoin has indeed broken $11,000 and seems to be holding.
(02:30) It’s fairly difficult to not mix politics and cryptocurrency. Cryptocurrency itself has political and philosophical attributes built it – namely, decentralization. This week saw Coinbase taking a hit for attempting to stay apolitical during one of the most politically charged years in modern times. For some backstory, near the end of September of this year, the CEO of Coinbase, Brian Armstrong, released a blog post essentially stating that Coinbase doesn’t want it’s employees getting political because it can cause trouble to their team dynamic. The blog post is linked in our summary at talk.bitcoin.tax, but here are a couple sentences from the article, summarizing Armstrong’s stance:
Referring to societal issues and social activism, Armonstrong stated that “We don’t engage here when issues are unrelated to our core mission, because we believe impact only comes with focus…they have the potential to destroy a lot of value at most companies, both by being a distraction, and by creating internal division.”
In the post, Armstrong concedes that this may not be a popular stance, and he understands that many could disagree with him. It’s certainly a bold stance, and one that does seem in opposition to the stance many companies have taken in 2020.
Clearly, a good chunk of his employees were not on board with this approach – in a follow up blog post released yesterday, Armstrong said that about 5% of Coinbase employees have left the company as a result of the apolitical stance, and a number of other employees are in talk to depart as well. Interestingly, Armstrong highlights that underrepresented populations employed at Coinbase do not represent the bulk of employees leaving the company, and that Coinbase will “continue to keep a close eye on this to ensure we are building a diverse, inclusive environment where everyone feels they belong”.
Despite losing a decent amount of employees, including the VP of business and data Dan Yoo, Brian Armstrong seems to be doubling down on his position: “While having team members leave is never easy, I think we will emerge as a more aligned company from this. From time to time we need to rearticulate and clarify our cultural norms as we continue scaling. I’m excited to be moving forward as #OneCoinbase to pursue our vision of economic freedom for every person and business.”
Coinbase is certainly a giant in terms of exchanges, but they do receive a decent amount of criticism from those in the crypto community who prefer to hold their own cryptocurrency. It’s doubtful that this added controversy will lead to their ultimate decline, but it’s certainly a bold move in today’s climate. Is it the right move? Of course, that depends on who you ask, and the context of that question – is it a good move in terms of morals, ethics, or even optics? Is it a good move for the bottom line of the company? Keeping in line with Brian Armstrong’s apolitical vision, I’ll withhold judgement either way!
(05:11) Finally – a quick reminder…the extended tax deadline is rapidly approaching! That means that if you filed an extension, you have until October 15th to file your taxes. Bitcoin.Tax is available for you to calculate your cryptocurrency capital gains – and if you are feeling particularly overwhelmed, you can sign up for the Bitcoin.Tax full-service option, where one of our professionals will do it all for you.
If you’ve already filed your 2019 taxes, you can still utilize Bitcoin.Tax to start working on your 2020 taxes early. Enter in all of your trading data and view the capital gains and losses you’ve made throughout the year. Link all of your data and tax years together to get the ultimate picture of your cryptocurrency gains. Sign up for free now for the leading cryptocurrency tax software!
That’s it for this week’s episode of The Cryptocurrency Informer. Don’t forget – if you want to read more about each of these stories, go to talk.bitcoin.tax and click on The Cryptocurrency Informer link. Every episode is accompanied by a number of relevant links for each story, so you can do your own in-depth research on the topics that interest you.
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Have a great weekend everyone – stay informed and stay safe!
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