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Bitcoin recovers to $50,000 as Jack Dorsey's Square invests $170m

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Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·2-min read
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FILE - In this Wednesday, Oct. 28, 2020, file photo, Twitter CEO Jack Dorsey appears on a screen as he speaks remotely during a hearing before the Senate Commerce Committee on Capitol Hill, in Washington. Dorsey broke his silence to defend his company’s ban of President Donald Trump as the right decision, but warned that it could set a dangerous precedent. The ban, he said, revealed Twitter’s “failure” to create an open and healthy space for what Dorsey calls the “global public conversation.” (Michael Reynolds/Pool Photo via AP, File)
Twitter and Square CEO Jack Dorsey appears on a screen as he speaks remotely during a hearing before the Senate Commerce Committee on Capitol Hill, in Washington. Photo: Michael Reynolds/Pool Photo via AP, File

Bitcoin (BTC-USD) has stabilised near $50,000 (£35,276) after news broke that Square (SQ), the payments business run by Twitter cofounder Jack Dorsey, had invested another $170m in the cryptocurrency.

Square disclosed in fourth quarter earnings on Tuesday that it had bought 3,318 bitcoins for a combined $170m. The investment follows a $50m purchased disclosed last October and means Square now has 5% of its total assets invested in the world's biggest cryptocurrency.

"Square believes that cryptocurrency is an instrument of economic empowerment, providing a way for individuals to participate in a global monetary system and secure their own financial future," the company said in a statement.

"The investment is part of Square’s ongoing commitment to bitcoin, and the company plans to assess its aggregate investment in bitcoin relative to its other investments on an ongoing basis."

WATCH: What is bitcoin?

The news helped to stabilise the price of bitcoin and reverse earlier losses. Bitcoin had fallen over 10% earlier on Tuesday, leading a broader cryptocurrency market sell-off. Bitcoin was trading around the $45,000 mark at its worst point.

By 9am in London on Wednesday, bitcoin had recovered to trade at $50,671.83.

The market pullback at the start of the week followed a huge rally for bitcoin that started last October. Earlier this month bitcoin hit a new all-time high above $58,000, which marked a more than 400% rise over the last five months.

The rally has coincided with increased institutional and retail investor interest. Alongside Square, Tesla (TSLA) has also invested some of its assets into the bitcoin. The electric car maker has put $1.5bn into the cryptocurrency. PayPal (PYPL), Mastercard (MA), and BNY Mellon have all announced plans to handle bitcoin on behalf of clients.

WATCH: 'Dr Doom' economist says 'retail suckers' with FOMO will eventually get crushed on Bitcoin