This article is written exclusively for Investing.com.
and digital currencies spiked in late 2017 when the crypto leader's price rose to the $ 20,000 per token level. The market cap of all cryptocurrencies climbed to a high of over $ 800 billion and it seemed that it was only a matter of time before it hit the trillion dollar mark. However, that has yet to be done, as those high levels have not been maintained.
Last week, the market capitalization approached the $ 400 billion level. Bitcoin traded on either side of USD 10,000 as its price consolidated in the mid-range between the 2010 six-cent level and the 2017 USD 20,000 level. Later in the week, it rose upward to over $ 13,000 per token.
SQ Invests $ 50 Million in Bitcoin
The CFTC in the US classifies digital currencies as a commodity. While the commodity asset class is generally the most volatile, cryptocurrencies have seen even greater price differentials in recent years. In 2010, Bitcoin traded at just six cents a token and rose to the USD 20,000 level in 2017. On October 25, the asset class leader in digital currency reached the $ 13,298.0 level, a new high for 2020.
Square, a high-tech payments and point-of-sale company, announced that it has purchased 4,709 bitcoins worth $ 50 million. The average price was just under $ 10,620 per token.
As the daily chart shows, Bitcoin has appreciated more than $ 2,500 per token since its announcement through the October 22nd high of $ 13,140.
Source: CQG
The investment is in line with the mission of the SQ. The company believes that bitcoin and cryptocurrencies are tools of & # 39; economic empowerment & # 39 ;.
Monthly Pack for Twitter and Square CEO Jack Dorsey
Innovator and entrepreneur Jack Dorsey is uniquely positioned in the technology sector as CEO of two publicly traded companies, SQ and Twitter (NYSE :).
Dorsey is also a co-founder of Twitter and the founder of Square. October was a busy month for the controversial CEO. One of his companies made a statement on digital currencies and bet on the future of digital currencies. The other cases were in the crosshairs of the US government as some Washington DC senators accuse TWTR of meddling in the election.
The payments company and social media platform have a combined market capitalization of more than $ 120 billion. SQ's market cap of over $ 78 billion is roughly twice TWTR's. However, TWTR has a higher profile these days as tweeting has become a powerful tool for many segments.
President Trump became the tweeter in chief during the 2016 campaign and after being elected the forty-fifth president of the United States. The president claims that Twitter has been an invaluable tool for him to communicate with his supporters, given his view that traditional news media is driving what he "fake news". calls.
The purchase of bitcoin by SQ and TWTR's status as a leading media platform put Jack Dorsey in Washington DC's crosshairs, and the pressure could continue to mount in the coming months and into 2021.
Controversy Over Censorship and Money Supply
A New York Post story accusing former Vice President Joe Biden's son of questionable business relationships caused a storm. TWTR decided to ban the information and Facebook (NASDAQ 🙂 did the same. TWTR has suspended some accounts of those who retweet the story, sparking more than a minor backlash from Republican senators.
Jack Dorsey and Mark Zuckerberg, FB's founder and CEO, will now testify before the US Senate to explain why they decided to ban the story from one of the leading US newspapers and the reason for the suspension. accounts. Some lawmakers accuse the companies of electoral interference by censoring the information. The TWTR and FB platforms are protected under Section 230 of the Communication Decency Act, which states that “No provider or user of an interactive computer service should be treated as the publisher or speaker of information provided by any other information provider. content is provided. " Some lawmakers are likely to argue that Dorsey and Zuckerberg's decision to censor NY Post's story was an act of censorship, which should eliminate Section 230 protections.
Meanwhile, Dorsey & # 39; s other company, SQ, in addition to the censorship issue, has something in common with FB that can lift the hair on the neck of Congress. In 2018, Jack Dorsey said he believes digital currencies will eventually become the world's will become a single & # 39; In 2019, Zuckerberg's Facebook rolled out a plan for its Libra token, another digital currency instrument. There is a two-pronged deal in contrast to digital currencies. The US and other governments around the world control the money supply while issuing legal tender. A shift from traditional currency instruments to cryptocurrencies would limit or even eliminate that control.
A Grilling From Washington
The CEO & # 39; s of TWTR and FB, along with (NASDAQ 🙂 Sundar Pichai, will video conference on October 28 for the Senate Trade Committee appear. The CEO & # 39; s will ask about their policies for moderating content on their platforms.
The hearing will focus on section 230 of the Communications Decency Act and could eventually lead to steps to remove protection for the platforms. Democrats and Republicans in Washington DC have raised concerns about the power of social media and the influence of the leading technology companies when it comes to anti-competitive practices and access to and use of data. Last week, the US Department of Justice accused GOOGL of antitrust violations.
I wouldn't be surprised if digital currencies appear on October 28 or subsequent hearings. The Senate Committee previously invited the CEO's with the threat of subpoenas if they refused to appear.
The Technology Sector Faces Headwinds in 2021
With the Highly Controversial Elections in November 3. Democrats and Republicans in Washington DC today disagree on almost nothing. In the aftermath of the competition, we are likely to see elected representatives taking action against the leading technology companies. While each political party has different reasons, there is twofold support for reigning in the power and influence of the corporations.
More regulation and even the disintegration of some companies could lie ahead. The US is not the only government concerned about the issue, as the EU has also taken steps to limit the rise of the tech companies. The investment and support of digital currencies is another issue on the toes of governments. Expect a lot of volatility in technology stocks in the coming months. Governments and regulators could introduce legislation that limits their activities, splits them into smaller and unrelated entities, and puts pressure on revenues.
Meanwhile, Bitcoin and other digital currencies have been consolidating in recent months. Blockchain technology is widely accepted, but governments around the world are unlikely to surrender control of the money supply to a global medium of exchange in the short term. However, Bitcoin, the leader of the pack, has taken a positive flight with its next target at its 2019 high of $ 13,915 per token. Above that, the 2017 peak of over $ 20,000 comes into play.
