Cryptocurrency is the new investment theme, drawing a growing number of investors and mainstream companies. Concerned by the unending turmoil triggered by the COVID-19 pandemic, institutional investors are increasingly turning their attention to digital assets.
Mode Bitcoin Bet
Square Inc. (NYSE:SQ) has already made known its strong belief about Bitcoin’s long-term prospects with a massive $50 million investment in the flagship cryptocurrency. The investment was mostly driven by a strong belief that digital currencies are not fads.
Mode Global Holdings, listed on the London Stock Exchange, is the latest company to take note of the flagship cryptocurrency prospects with a massive investment. It becomes the first publicly-traded company in the U.K to invest part of its cash reserves on the unregulated Bitcoin.
The company says it has invested 10% of its cash reserves as it looks to take a piece of the burgeoning cryptocurrency pie. Mode is to hold Bitcoin as one of its treasury assets. In a statement, the company says the investment is part of its long-term goal to protect investor’s assets from currency debasement.
The investment into the burgeoning cryptocurrency space is also part of a broader diversification plan as Mode looks to gain exposure to areas with tremendous opportunity for growth. The company has felt the full force of the U.K cutting interest to record lows of 0.1%.
Mode Bitcoin investment attests to a growing belief about Bitcoin’s credential as a store of value owing to its unique risk-reward attributes. The flagship crypto has also emerged as a reliable safe-haven rivaling gold and the U.S dollar on this front.
However, it is not the first company to bet on Bitcoin, given its unique status as a store of value, Stone Ridge has already purchased $115 million worth of Bitcoin. MicroStrategy, on its part, has invested $425 million in BTC. Given the wave of investments, Bitcoin is likely to become a staple for more company’s portfolio as the dollar status as a global reserve currency remains under pressure.
PayPal Cryptocurrency Service
PayPal Holdings Inc. (NASDAQ:PYPL) is another mainstream company that has taken note of cryptocurrencies prospects in the ever-burgeoning global digital economy. The company has confirmed plans to make it possible for people to hold, buy, and sell cryptocurrencies, including Bitcoin, on its flagship online app.
The company has already secured a conditional license approval from the New York State Department of Financial Services to offer support for cryptocurrencies on its apps. Likewise, the company will now allow transactions to be made through its systems.
Some of the crypto transactions, which PayPal system will support include Bitcoin, Etherium, Bitcoin Cash, and Litecoin. The service will be available to U.S account holders at the start. However, there are plans to make the service available in other jurisdictions.
In pursuit of growth opportunities in the cryptocurrency space, PayPal s looking to make it possible for customers to use their cryptocurrency holdings for payments at more than 26 million merchants globally. In this case, consumers will be able to convert cryptocurrency balance into fiat currency with the certainty of value to complete transactions.
On its part, PayPal hopes the addition of support will help encourage crypto’s growth, which has been hampered by its limited utility as a medium of exchange.