Canadian Publicly-Listed Company Buys $2 Million Worth of Bitcoin with Treasury Funds
Canadian augmented reality (AR) firm joins in the bitcoin frenzy.
Canadian AR Firm Buys Bitcoin
In a press release issued on December 29, Canadian AR company NexTech AR announced its plans to make an investment worth $2 million in bitcoin (BTC) with plans to “add more in 2021.”
Per the source, the company will use its treasury funds to purchase bitcoin worth $2 million for “capital diversification.”
For the uninitiated, NexTech AR is a Vancouver-based AR firm that, as of September 30, had $12.79 million cash on hand. The investment of $2 million in BTC makes it an investment worth approximately 15.6% of the company’s total cash holdings.
Commenting on the development, Evan Gappelberg, CEO, NexTech AR, noted:
“Our investment in Bitcoin is part of our new capital diversification and allocation strategy with the intent to maximize 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 is currently yielding 0.06%. Bitcoin is a digital version of gold which has a total market capitalization of $10 trillion versus Bitcoin’s total market capitalization of only $500billion. We think that as part of the digital transformation a paradigm shift to digital gold is underway and as Bitcoin is seen more and more as a store of value, just like gold, it will catch up to gold.”
Notably, the press release notes the rapid rise of bitcoin as a legitimate store of value in 2020.
The coronavirus pandemic stricken year proved to be a major one for the premier cryptocurrency as numerous high-profile firms have, to date, made public their growing trust in bitcoin.
Major New Players in the Bitcoin Space
As mentioned earlier, 2020 witnessed institutional adoption of bitcoin unlike ever before.
Earlier this year, MicroStrategy announced that it was purchasing bitcoin as a reserve asset.
Jack Dorsey’s Square, Guggenheim Partners, and U.S. insurance giant, the Massachusetts Mutual Life Insurance company all followed MicroStrategy’s lead by purchasing bitcoin as a hedge against global economic uncertainties and the weakening greenback.