Bitcoin Treasury Strategy Increases DeFi Technologies’s Stock Price in Canada

  • The parent business of Canadian ETF provider Valour, DeFi Technologies, has accepted Bitcoin as a treasury reserve asset.

The Bitcoin treasury playbook developed by MicroStrategy has now extended to Canada, where a public firm that focuses on cryptocurrency has adopted Bitcoin as its main asset for treasury reserves.

The next major worldwide public company to go big on Bitcoin is DeFi Technologies, which trades on Cboe Canada under the symbol “DEFI.” Its motivations are strikingly similar to those of its predecessors.

According to DeFi Technologies, which released a press release on Monday, “Bitcoin has unique characteristics as a scarce and finite asset, making it a reasonable hedge against inflation and a haven from monetary debasement.”

The corporation announced the acquisition of 110 Bitcoin, which as of this writing is valued at CAD $10.5 million (USD $7.6 million), to launch its new strategy. The company’s stock increased 26% on Monday to CAD $2.01 in response to the news, increasing its total market capitalization to $588 million.

DeFi Technologies isn’t quite imitating MetaPlanet and MicroStrategy’s methods, though. The business reaffirmed to Decrypt that it has no intention of using loans or share dilution to buy more Bitcoin. 

They claimed that other than Bitcoin, they currently have no intentions to add any other cryptocurrencies to their balance sheet.

According to the corporation, which has a sizable cash position on its balance sheet, Bitcoin is a fair hedge against inflation and a refuge from depreciation of money. Bitcoin has a substantial opportunity to grow the company’s treasury in the short- to long-term, since it has been the best-performing asset over the last 10 years.

According to its website, DeFi Technologies—as its name implies—is already a player in the cryptocurrency space, offering a range of crypto-related investment products, such as exchange-traded products (ETPs) and strategic collaborations in addition to vital Web3 infrastructure.

A new Bitcoin ETP that promises to give investors a 5.65% annual income is among the CAD $837 million in assets under management held by Valour, the company’s asset management-focused subsidiary.

According to DeFi Technologies, when Bitcoin becomes more widely accepted, it could potentially yield enormous returns due to the notable difference in value between it and conventional assets.

Reflexivity Research, a cryptocurrency market research company co-founded by well-known Bitcoin influencers Will Clemente and Anthony Pompliano, is owned by DeFi Technologies.

DeFi Technologies is confident in Bitcoin’s ability to defend itself from monetary depreciation and to grow its treasury, which is why it has chosen to use it as its main treasury reserve asset. To kick off this plan, the company bought 110 Bitcoins.

Pompliano, who is currently the founder of Pomp Investments, tweeted that Bitcoin is gradually making its way into public business treasuries all around the world. We still own shares in DeFi Technologies ($DEFTF) because we think the company is currently cheap.

The practice of keeping a significant quantity of Bitcoin in the treasury as a reserve asset was first introduced by MicroStrategy, which has subsequently expanded to become the largest corporate holder with 214,400 BTC, or around $15 billion at the current price.

The publicly traded Japanese company MetaPlanet likewise chose Bitcoin as its preferred treasury reserve asset back in April, and as a result, its stock price enjoyed historically high gains.

Following a $57 million purchase last month, healthcare products company Semler Scientific revealed last week that it would be purchasing up to $150 million in Bitcoin. In the last 30 days, SMLR’s stock has increased by 63% as well.

Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.

Author: Puskar Pande

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