Square, the US fintech firm founded by Twitter’s Jack Dorsey, has bought $170m (£120m) of Bitcoin, making it one of the biggest corporate cryptocurrency holders alongside Tesla. 

The investment comes in addition to Square’s purchase of $50m in Bitcoin last year. 

In a note to investors accompanying its fourth quarter results,  Square said: “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."

The company’s Bitcoin holdings represented about 5pc of the company’s total assets at the end of 2020, Square added. 

A jump in online payments due to the Covid-19 pandemic had helped double Square’s revenue in the fourth quarter to $3.16bn.

Corporate interest in the cryptocurrency has surged, helping to push up the digital coin’s price, attracting Bank of NY Mellon Corp and MicroStrategy.

The price of Bitcoin plunged on Monday and Tuesday, wiping $10,000 from its value after Janet Yellen, the US Treasury Secretary called the coin “highly speculative” and “inefficient” for transaction. 

It traded for $48,000 on Tuesday, a dip from its all-time high of $58,354 over the weekend. However, its price recovered somewhat after Square’s news. Analysts have speculated that corporate buyers of Bitcoin could unleash a new wave of interest in the cryptocurrency.