DeFi Technologies, a publicly traded company specializing in Web3 technologies, has followed in MicroStrategy’s footsteps by unveiling its Bitcoin Treasury strategy. This company is now the most recent public company to adopt Bitcoin as its main reserve asset.
The Rationale Behind Bitcoin Adoption
Corporate companies and institutional investors are adopting BTC as a main reserve asset due to its potential as a hedge against inflation, and scarcity, and a store of value like gold. It also helps diversify treasury holdings and tap into it for long-term growth. DeFi Technologies’ move to embrace Bitcoin aligns with this trend.
The company made an initial purchase of 110 Bitcoins (worth approximately $7.7 million) after transitioning from Toronto’s Cboe Canada where it traded its shares. CEO Roussy Newton anticipates potential treasury growth from this investment.
Before DeFi Technologies, MicroStrategy Inc. pioneered this move. Michael Saylor’s view on “holding large cash is akin to sitting on a melting ice cube” drove MicroStrategy to dive into corporate Bitcoin adoption back in 2020.
The company has been making significant BTC purchases ever since, topping up its portfolio with millions worth of Bitcoin purchases. MicroStrategy’s bold move really paid off as it holds the title of the largest corporate holder of Bitcoin, boasting a substantial $15 billion Bitcoin in its portfolio
Following MicroStrategy’s lead, Tesla, Semler Scientific, a medical technology company, Square Inc also joined the trend. Thus far, they have acquired millions of dollars worth of the digital asset as part of their treasury reserve holdings.
Bitcoin’s Adoption Amid Price Fluctuations
2024 comes off as the year institutions and political leaders are embracing Bitcoin and crypto as a legitimate asset class.
This recognition has stirred a major surge in the price of BTC. However, at the time of writing, the digital asset has dipped in price compared to its usual bullish trend. Despite the bearish outlook, Robert Kiyosaki the “Rich Dad Poor Dad” author is bullish on the digital coin with growing optimism on its potential to grow closer to the $100,000 mark.
According to CoinMarketCap, Bitcoin is presently trading at $69,605.13, down 0.27% in the last 24 hours.