$2 million in Bitcoin: Again, a company has bought massive amounts of BTC as a hedge
As we have reported extensively, millions have been invested in cryptocurrencies by prominent institutional investors in recent months to hedge their portfolios against the current macroeconomic inflation.
Moreover, many believe that Bitcoin will play an increasingly important role in finance. For example, Paul Tudor Jones writes in an investor letter that Bitcoin Formula will be the „fastest horse in the race“ due to the great monetary inflation:
„We are witnessing great monetary inflation – an unprecedented expansion of every form of money unlike anything the developed world has ever seen.“
Other Wall Street investors have shared similar views. These statements have led to companies trying to hedge their investment portfolios and government bonds with bitcoin.
This began earlier this year with MicroStrategy, which bought BTC in August with $250 million in company funds because it saw the leading cryptocurrency as a hedge against inflationary trends. The company continued to bet on BTC in the months that followed and is now more than 100 per cent above its original purchase.
The move has prompted other public companies to invest in Bitcoin with corporate money as a hedge against the devaluation of the US dollar.
Other companies are following MicroStrategy’s bold bitcoin move.
According to the Twitter account „Deltaone“, which reposts interesting Bloomberg headlines on its Twitter feed, NexTech will buy $2 million worth of BTC with company money.
NexTech is a publicly traded Canadian company based in Vancouver. It is a „leading provider of virtual and augmented reality (AR) experience technologies and services for eCommerce, education, conferences and events.“
About the investment, the company’s CEO writes:
„Our investment in Bitcoin is part of our new strategy of capital diversification and allocation with the intention of maximising long-term value for our shareholders. This initial investment reflects our belief that Bitcoin is a long-term store of value and an attractive investment asset with more long-term appreciation potential than holding cash, which currently has a yield of 0.06%.“
Managing director Evan Gappelberg adds that bitcoin will gain traction over gold in the coming years.
Just yesterday, Nasdaq-listed Greenpro Capital Corporation announced a similar move. Greenpro plans to raise up to $100 million by 2021 to buy BTC with.
Why it all makes sense
It has been argued that companies buying Bitcoin are making their respective stocks more attractive by doing so.
Prominent equity research firm Citron Fund wrote in a November report that MicroStrategy’s MSTR shares are attractive and are the leading way to invest in BTC through the exchange.
„If investors are looking for ways to profit from Bitcoin on the exchange, they should look no further than MSTR. At these prices today, investors are getting a world-class software company at a discount and a free call option to own a growing treasure trove of Bitcoins.“