Another company buying bitcoin as capital allocation strategy

AmoreJaz

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Quote from: MCobian on August 27, 2020, 05:18:27 PM

Thank you for sharing information about companies investing in Bitcoin to tackle inflation, as there are more and
more companies who buy Bitcoin will make the Bitcoin price even higher. But unfortunately companies like Snappa,
which have the capital allocation strategies with investing in Bitcoin are still rare. Most companies are still hesitant
about investing in Bitcoin, fear of the volatile price of Bitcoin.

i believe there are already big companies which are secretly stashing their bitcoin as part of their investments. though up until now we are not seeing many companies disclosing about their participation in crypto but i guess they are many of them already.

but just to comment on the article regarding bitcoin as reserve asset. when he compares bitcoin and gold. though there are advantages in btc over gold but don't forget the vital usage of gold in many industries like electronics and computers. are we going to see the existence of btc if there's no gold in our electronics equipment/computer? just something for us to remember by.

MCobian

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Thank you for sharing information about companies investing in Bitcoin to tackle inflation, as there are more and
more companies who buy Bitcoin will make the Bitcoin price even higher. But unfortunately companies like Snappa,
which have the capital allocation strategies with investing in Bitcoin are still rare. Most companies are still hesitant
about investing in Bitcoin, fear of the volatile price of Bitcoin.

gentlemand

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Quote from: exstasie on August 27, 2020, 03:29:53 PM

I have a feeling they aren't investing cash they would need for day-to-day operations. Regardless, they are either going to look brilliant or completely retarded, depending on what the market does. Cheesy

I wonder. The companies arriving now should do well. But that won't be the majority of course. They'll arrive just as it's priming to bone them up the botty. No reason why they won't be like every other starry eyed newcomer and they'll go overboard.

When a Bitcoin crash starts destroying conventional companies with otherwise no relation to it that's a rather different matter to us wingnuts getting a kicking.

Twentyonepaylots

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Quote from: sabbir2world on August 26, 2020, 10:26:33 AM

The covid-19 has messed up the global economy resulting inflation in most of the countries. Government can print as much as they want to compensate the situations.

The massive printing of paper notes will hurt its value as a currency, this might be the reason why that company already injected their money in bitcoin coz they see a lot of good things in bitcoin compare to fiat money considering how they think the pandemic will last. I never heard words from this company, it seems new yet old coz they are founded in 2015. It was a good move for me tho.

Quote from: sabbir2world on August 26, 2020, 10:26:33 AM

That leads us to the blockchain industry. I think this is our future. ✌

Blockchain is really the future, future of almost everything, and the pandemic speed it up.

exstasie

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Quote from: hatshepsut93 on August 26, 2020, 09:17:02 PM

Quote from: exstasie on August 24, 2020, 06:26:28 PM

Of course, this ignores the ongoing asset bubble. The lack of returns in bond and treasury markets and, to be frank, the limited mid and long-term growth prospects for the overall economy, is driving speculative bubbles in risk assets.

Now companies are seeing they can not only grow their balance sheets and stock value through stock buybacks, but by investing in quickly growing risk assets like gold and BTC. Even if their company isn't actually growing, their balance sheet will be.

I hope these companies put some stop-loss orders, cause it's so easy to get rekt, especially with Bitcoin. Last year it reached $13k and went to a bearish/sideways market for the rest of the year. This year it lost 50% in one day. If a company puts more than they can afford to lose in BTC, they might seriously screw themselves in such drop, cause they would end up with not enough funds to operate.

I have a feeling they aren't investing cash they would need for day-to-day operations. Regardless, they are either going to look brilliant or completely retarded, depending on what the market does. Cheesy

Microstrategy stock will probably become linked to BTC price action to a good degree, just like RIOT, though I can't say I've looked into their financials deeply enough to know how much this acquisition should matter.

Aside from the investment aspect, it's a very interesting strategy if only because it puts lots and lots of eyes on their company, generating interest where there previously was none.

bearexin

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I believe that if a lot of companies start to use bitcoin as a way to actually save up some of their money further away from fiat and they would actually do something about bitcoin price as well as a whole. For two reasons, one reason would be that they would be able to actually buy bitcoin and buying bitcoin would increase the price of bitcoin as well, and secondly because they would hold it and not sell it mostly which would not allow bitcoin price to drop down as well.

Both of these combined would allow the bitcoin world get the attention and with that extra attention we would actually get bigger. It is a great thing but only would make a difference if there is enough of them all doing it at the same time, we need more than one, we need a thousand of them all at the same time.

ilovealtcoins

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They seem to have noticed bitcoin. Many institutional investors have come in and bought bitcoins for a long time without our knowledge. Bitcoin has quite a good price stability. In 2018-2020, although bitcoin has many fluctuations in value, in the end, bitcoin still has good growth. I think there will be more financial institutions investing in bitcoin this year and the future.

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Quote from: tomahawk9 on August 26, 2020, 09:24:19 AM

Small companies won't make it (capital allocation strategies involving cryptocurrencies) public for two reason: 1) the stigma cryptos and specifically Bitcoin still have in the public eye, 2) the allocation is so small it's not even worth making it public,

This is true, yet Bitcoin still bears the stigma of some kind of internet fraud and is identified as multi-level marketing scheme or ransomware money. While anyone trying to figure out what this is about is likely to change their minds, people are still more likely to listen to the mainstream media and their politicians than to themselves. I myself have repeatedly felt on my skin very negative and offensive comments when I mentioned Bitcoin to acquaintances and friends, unfortunately nothing has changed about it in the last 4-5 years.

It's hard to comment on whether this is just a PR move or whether the company's team has really recognized the opportunity to allocate some of its money to Bitcoin - but still something positive is happening in that direction, and it is a known fact that small investors usually imitate big ones.

hatshepsut93

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Quote from: exstasie on August 24, 2020, 06:26:28 PM

Of course, this ignores the ongoing asset bubble. The lack of returns in bond and treasury markets and, to be frank, the limited mid and long-term growth prospects for the overall economy, is driving speculative bubbles in risk assets.

Now companies are seeing they can not only grow their balance sheets and stock value through stock buybacks, but by investing in quickly growing risk assets like gold and BTC. Even if their company isn't actually growing, their balance sheet will be.

I hope these companies put some stop-loss orders, cause it's so easy to get rekt, especially with Bitcoin. Last year it reached $13k and went to a bearish/sideways market for the rest of the year. This year it lost 50% in one day. If a company puts more than they can afford to lose in BTC, they might seriously screw themselves in such drop, cause they would end up with not enough funds to operate.

sunsilk

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The article has shown the stock-to-flow model. But, this is another good news for us. Whether the company will have a huge or small allocation in bitcoin, what matters is they are starting to invest and allocating in bitcoin.

It won't be long when other companies will also start to describe how good bitcoin is as an investment and, how will people who don't have knowledge about bitcoin but aware of inflation and what's currently happening in the world's economy.

sabbir2world

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The covid-19 has messed up the global economy resulting inflation in most of the countries. Government can print as much as they want to compensate the situations. That leads us to the blockchain industry. I think this is our future. ✌

tomahawk9

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Quote from: Lucius on August 26, 2020, 08:23:14 AM

What I'm pretty sure of is that there are a lot more cases like this that haven't and won't be exposed publicly, but obviously people are starting to realize what the benefits of Bitcoin are. The advantage of those who realized this 5 or even 10 years ago is more than obvious.

Small companies won't make it (capital allocation strategies involving cryptocurrencies) public for two reason: 1) the stigma cryptos and specifically Bitcoin still have in the public eye, 2) the allocation is so small it's not even worth making it public,

having said that, and based on the size of this company called "snappa", i think this is a PR move, probably want to generate some noise and gain exposure and maybe get a gig or two from it? So I have to disagree with OP when he says:

Quote from: hugeblack on August 24, 2020, 01:28:44 PM

it might give the average user an opportunity to rethink about their investment.

Unlikely. Average user as you call them don't even know what Snappa is, so why follow their footsteps? Only big companies may be able to achieve some sort of change in financial strategies and views in the general public

Harlot

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Quote from: Harlot on August 26, 2020, 05:22:04 AM

Quote from: gentlemand on August 25, 2020, 06:44:56 PM

Quote from: Harlot on August 25, 2020, 06:37:56 PM

~snip

Though there've certainly been better times in recent history, around about now will likely turn out to be a considerably better time than in a year or a bit more if things heat up. That's when we're going to see the highest number of companies doing it and it might become some sort of miniature bubble all of its own with stocks rising every time a company declares they have a position. Then it all goes tits up and takes them with it a very short time afterwards.

But we don't know how these companies will react to these kinds of price movement. Let say on one of these days BTC suddenly drop at 10%, there is a chance for these companies who have their cash reserves invested in Bitcoin will suddenly bail out of their position they will obviously be contributing to the price drop more. We are talking about companies who wants profits and I know that they aren't really sitting on their positions for too long in order for them to make a profit. Either way companies who are investing big in crypto will always be a double-edged sword as their capital can definitely affect the price movement of Bitcoin.

Here is my post that is somehow related to more and more companies buying Bitcoin as an investment. I personally don't see this as an all through out good news as companies having large portions of the current circulating supply in Bitcoin is always no good, they are technically whales that have the power to influence the market. Yes its good news that finally Bitcoin is being recognized on the commerce end but price movement wise we can be 50-50 because of them and how they see the price movement of Bitcoin.

Lucius

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It may not be a company that most of us are familiar with, but as far as I can see, they have been providing tools for various graphic solutions since 2015, and they are successful in that. I also noticed that this is a very young team that is obviously not trapped in the shackles of the current systems, but is ready to accept some new solutions.

Whether this and recent cases are just exceptions, or whether some trend has been created is a really interesting question. What I'm pretty sure of is that there are a lot more cases like this that haven't and won't be exposed publicly, but obviously people are starting to realize what the benefits of Bitcoin are. The advantage of those who realized this 5 or even 10 years ago is more than obvious.

Taskford

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Quote from: Mauser on August 26, 2020, 04:33:29 AM

Quote

On one hand, you have a group of people who think an ever expanding monetary base and increasing amounts of government debt doesn’t matter as long as “inflation” is low.

On the other hand, you have many people who believe that quantitative easing and increasing government debt levels are leading to asset price inflation and a widening wealth gap.

The article is very interesting. I definitely belong to the second group, as do most on this forum I assume. Always good to hear that more companies move into crypto currencies. I think that more and more companies will eventually realise that just relying on Fiat is not the way to go. In the long run this is just another factor for bitcoins to go up as most countries will keep continuing to expand their monetary base and government debt.

Its good adoption by them knowing bitcoins have great future and also had many advantage compare to traditional payment system. And I really think that there are more companies will follow but I also want to see that bitcoin will go on mainstream since this could trigger the historical adoption not only with Btc but as well with top alts listed in the market.

Mauser

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Quote

On one hand, you have a group of people who think an ever expanding monetary base and increasing amounts of government debt doesn’t matter as long as “inflation” is low.

On the other hand, you have many people who believe that quantitative easing and increasing government debt levels are leading to asset price inflation and a widening wealth gap.

The article is very interesting. I definitely belong to the second group, as do most on this forum I assume. Always good to hear that more companies move into crypto currencies. I think that more and more companies will eventually realise that just relying on Fiat is not the way to go. In the long run this is just another factor for bitcoins to go up as most countries will keep continuing to expand their monetary base and government debt.

yohananaomi

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The risk of inflation will always haunt investment in times of pandemic like this, but many experts also have an analysis that may differ from the opinion that is currently developing. people may still invest in gold with the assumption that he thinks might be the best, but on the one hand there are also those who think that investing in bitcoin is also very profitable, each investor will determine the direction that might be different from the perception of the experts. but all return to those who have the capital to determine it.

exstasie

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Quote from: Finestream on August 24, 2020, 05:49:49 PM

Quote

Let me ask you a question…

Would you rather save money in a currency whose supply is inflating each year? Or would you rather save in a currency whose terminal supply is programmatically fixed?

I guess this is a good question that we should reflect on, we are too confident with the fiat system as a reserve which in reality it's inflating.

In theory, you just need to beat the inflation rate, which is targeted at 2%. Most people don't keep their savings in cash, of course. A money market account or CD has terrible returns right now, 1% APY or less, but then again inflation is supposedly close to 0% so far this year. Higher inflation would usher in higher interest rates as well, at least in theory.

Of course, this ignores the ongoing asset bubble. The lack of returns in bond and treasury markets and, to be frank, the limited mid and long-term growth prospects for the overall economy, is driving speculative bubbles in risk assets.

Now companies are seeing they can not only grow their balance sheets and stock value through stock buybacks, but by investing in quickly growing risk assets like gold and BTC. Even if their company isn't actually growing, their balance sheet will be.

Finestream

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From the very first question of this article you shared, investors would already realize and would invest in bitcoin. I haven't read the whole article yet but I'm stuck with this;

Quote

Let me ask you a question…

Would you rather save money in a currency whose supply is inflating each year? Or would you rather save in a currency whose terminal supply is programmatically fixed?

I guess this is a good question that we should reflect on, we are too confident with the fiat system as a reserve which in reality it's inflating.
This small company knows the direction they are gong, they are diversifying the risk and they use crypto hedge the weakness of fiat in the long run.

If we are just smart, even at a small amount of bitcoin, we can start saving securing our future, I'm not saying we invest everything we have, but at least we also learn how to diversify in crypto.

Oasisman

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Though news like this is an essential thing for Bitcoin growth and adoption, but I doubt these companies who are considering Btc as their cash reserves may have heard a lot of bullish predictions about the $100k possible ATH in 2021. Because If you come to think of It, putting your reserved funds to Bitcoin, there is a very huge chance that you could lose more than 50% of your reserve funds when there's a heavy decline of Btc price, thus you'll never know when will It bounce back. Then comes an emergency where the company needs to spend the reserve. So, that basically bears a lot of risk.
During this time around when USD is failing and Btc is trying to make a run, I guess it's wise to switch to Btc than stay in fiat. But most likely these companies wouldn't put their reserve in Btc forever or after 2021 If there's a new recorded ATH.

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