Bitcoin, which seems to be as interesting to the Silicon Valley tech crowd as it does to the financial services sector lately, has found its biggest cheerleader in the form of Twitter chief executive Jack Dorsey.
Bitcoin and the wider cryptocurrency market, trapped in a painful bear trap that has wiped some $400 billion worth of value from the world’s cryptocurrencies over the last year, has struggled to justify its price as adoption stalls, bitcoin and crypto startups fight to keep the lights on, and closely-watched institutional investment is delayed.
Now, Dorsey, who as well as leading micro-blogging platform Twitter runs the U.S. payments processor Square and has some experience of working with bitcoin through its Cash App, has recently revealed he’s buying a whopping $10,000 worth of bitcoin per week and now has bought a bitcoin and cryptocurrency hardware wallet called a Trezor to store his swelling bitcoin holdings.
Bitcoin has lost some 85% of its value since its all-time highs over a year ago.GETTY
Dorsey’s support for cryptocurrencies, and bitcoin especially, has been widely known for some time. But now it seems Dorsey is putting his money where his mouth is, despite fears bitcoin could be supplanted by ambitious tech companies.
“Imagine being born this year, growing up only knowing that the potential for a global currency exists–that is exciting,” Dorsey told the Tales from the Crypt podcast this week, explaining how he became fascinated by bitcoin and crypto two years ago.
Dorsey said he had maxed out the $10,000 spending limits on the Cash App in recent weeks.
“What that person does with that realization [that the potential for a global currency exists] is amazing… It feels like that just accelerates things even faster. So I think there’s a massive acceleration that’s going to happen within the next 10 years,” Dorsey added. “I don’t wait around for that to happen to me or to us as a company, I want to help make it happen.”
Dorsey has previously said he thinks bitcoin is “likely” to become the internet’s first native currency.
“To me it all goes back to the internet. What does the internet want to be? It wants a currency, it’s always wanted a currency, it just hasn’t had the technology until 10 years ago,” Dorsey told Tales from the Crypt host Marty Bent.
Dorsey’s support for bitcoin will come as a surprise to some who have recently accused the Twitter boss of attempting to censor certain political views on the platform he cofounded. While Dorsey has always denied that accusation, Twitter is struggling to balance its status as the de facto public forum with its desire to protect people from controversial opinions and harassment.
Dorsey will find bitcoin equally, if not more, difficult to control.
These concerns have led social media giant Facebook to begin development of its own cryptocurrency, rather than try to adopt and integrate bitcoin or a similar public digital token. As has U.S. bank J.P. Morgan.
Dorsey is though not alone in the tech world in his expectation that bitcoin and crypto is going to continue to grow and become more important over time, adding his voice to other tech industry gurus.
Dorsey, known as @Jack on Twitter, tweeted he has bought a Trezor wallet via the Cash App.TWITTER / @JACK
The likes of Tesla’s Elon Musk and Apple cofounder Steve Wozniak have heaped praise on bitcoin and its underlying technology, arguing the digital tokens are still in their early, formative days.
Musk, who last year got everyone fired up that he might be getting into bitcoin, this month called bitcoin’s structure “quite brilliant”, adding “it bypasses currency controls … Paper money is going away. And crypto is a far better way to transfer values than a piece of paper, that’s for sure.”
While it’s heartening for the bitcoin and cryptocurrency industry to see Dorsey plowing money into bitcoin, what bitcoin needs to succeed as a medium of exchange is increased adoption—something that will only come with the development of better tools and improvement of the user experience.
Dorsey needs to put some of that money he’s using to buy bitcoin into improving how people use it.
Bitcoin’s epic 2017 bull run was largely put down to expectations institutional investment and big bank support for bitcoin would soon arrive. As 2018 dragged on and that investment failed to appear many investors and traders got cold feet, bailing out of their bitcoin and cryptocurrency positions.
The bitcoin price rose sharply in 2017 but has since fallen back.COINDESK
This caused a bitter so-called crypto winter that has lead to many bitcoin, cryptocurrency and blockchain startups slashing jobs or shutting down already and a further turn for the worse could spell disaster for the burgeoning bitcoin sector.