Introduction
On Friday, DeFi Technologies, a crypto-focused investment provider, announced its acquisition of 110 BTC for corporate reserves. This strategic move led to a significant rise in the company’s stock price.
Bitcoin as Primary Treasury Reserve Asset
In a press release on Monday, the Canadian firm declared Bitcoin as its “primary treasury reserve asset.” This move makes DeFi Technologies the first Canadian public company to adopt Bitcoin in this manner, joining a growing list of global firms.
Market Reaction and Valuation
DeFi Technologies’ stock, traded on Cboe Canada under the DEFI ticker, surged 25% to CAD $220 by Monday’s close. The company’s market cap reached $641 million by the end of the day.
Institutional Grade Exposure to Digital Assets
According to the company’s website, DeFi Technologies offers “institutional grade exposure to digital assets through ETPs, strategic ventures, and critical Web3 infrastructure.” Its subsidiary, Valour, holds CAD $837 million (USD $607 million) in assets under management.
Diverse Crypto ETPs
The company offers various crypto ETPs, including a Bitcoin ETF with zero fees and another providing over 5% yield annually.
The Potential of Bitcoin
DeFi Technologies believes that Bitcoin’s unique characteristics as a scarce and finite asset make it a reasonable hedge against inflation and a safe haven from monetary debasement. The company also sees the potential for Bitcoin to generate significant returns as it gains wider acceptance.
The Growing Corporate Bitcoin Standard
DeFi Technologies owns Reflexivity Research, a crypto market intelligence firm founded by Anthony Pompliano and Will Clemente. In a Monday tweet, Pompliano confirmed that Pomp Investments remains an investor in DeFi Technologies, considering the firm undervalued.
Other Firms Adopting Bitcoin
In recent months, several firms, including Semler Scientific and MetaPlanet, have adopted Bitcoin as their primary savings vehicle. Unlike these firms, DeFi Technologies currently has no plans to use capital markets to raise additional funds for Bitcoin purchases.
MicroStrategy: The Largest Corporate Bitcoin Investor
MicroStrategy remains the largest corporate Bitcoin investor, managing 214,400 BTC.
Conclusion
DeFi Technologies’ acquisition of 110 BTC for its corporate reserves marks a significant step in the growing trend of companies adopting Bitcoin as a primary treasury reserve asset. This move underscores the increasing acceptance and potential of Bitcoin in the corporate world.
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