DeFi
DeFi Technologies Adopts Bitcoin as Treasury Reserve
Challenge Technologies Inc., a leading Canadian financial technology (fintech) company, has adopted Bitcoin (BTC) as its primary cash reserve asset. This strategic move involves an initial purchase of 110 BTC, signifying the company’s integration of traditional capital markets with decentralized finance (Challenge).
The move aligns with the broader trend of companies seeking portfolio diversification and alternative revenue streams in a changing economic environment.
DeFi Technologies invests in Bitcoin as a hedge against inflation
Recognizing Bitcoin as a major asset class with a market value exceeding $1 trillion, DeFi Technologies considers it an effective hedge against inflation. Bitcoin’s scarcity, limited nature, digital resilience, and architectural stability make it a more attractive option than traditional assets. Olivier Roussy Newton, CEO of DeFi Technologies, expressed the company’s confidence in Bitcoin.
“We have adopted Bitcoin as our primary treasury reserve asset, reflecting our confidence in its role as a hedge against inflation and a refuge against monetary devaluation. As the best performing asset of the last decade, Bitcoin offers significant short- and long-term potential to increase company cash flow,” Newton note.
Learn more: 7 Best Platforms to Buy Bitcoin (BTC) with Canadian Dollars
DeFi Technologies’ latest venture has attracted the attention of notable figures in the crypto industry. Anthon Pompliano, a prominent Bitcoin advocate and founder and partner of investment management firm Morgan Creek Digital Assets, shared his thoughts on the company’s decision.
“Bitcoin is slowly seeping into the treasuries of public companies around the world. We remain shareholders in DeFi Technologies (DEFTF) and believe the company is still undervalued,” he said. wrote on X (Twitter).
DeFi Technologies’ decision comes amid significant changes in monetary policy. Recently, the The Bank of Canada (BoC) has decided to lower its key rate from 5% to 4.75%, aimed at easing the burden on highly indebted consumers.
Lower interest rates make borrowing cheaper for both consumers and businesses. This change potentially leads to increased spending and investment.
Lower interest rates can also mean lower capital costs for companies like DeFi Technologies. Additionally, as returns on safer investments decline, the attractiveness of alternative assets such as Bitcoin is increasing.
Matteo Greco, research analyst at Fineqia, shared his thoughts on this perspective. Greco emphasized Bitcoin’s Potential to Act as a Leveraged Version of Gold for those who believe in its store of value attributes.
Learn more: How to invest in Bitcoin?
According to him, viewing Bitcoin as a store of value makes sense for portfolio allocation. Although gold has historically maintained its purchasing power with stability, it offers limited performance. Bitcoin, on the other hand, can be considered a leveraged version of gold for those who believe in its potential store of value.
“Over the past 15 years, Bitcoin has consistently increased in value relative to fiat currencies, albeit at a higher rate. volatility. Investors who accept the possibility of short-term withdrawals have found Bitcoin to be an extremely valuable investment in the medium to long term,” he told BeInCrypto.
Disclaimer
In accordance with the Trust Project guidelines, BeInCrypto is committed to providing unbiased and transparent reporting. This news article aims to provide accurate and current information. Readers are, however, advised to independently verify the facts and seek professional advice before making any decision based on this content. Please note that our Terms and conditions, Privacy PolicyAnd Disclaimer have been updated.