Key Takeaways
- Canadian firm Matador Technologies has confirmed the shift to the Bitcoin Reserve Strategy.
- They have confirmed the leveraging of Bitcoin as a treasury-reserved asset by this month.
- Matador Technologies’ board of directors expressed concerns about the potential devaluation of the Canadian currency.
- The strategic move has been initiated after considering the future potential of Bitcoin.
- Matador stated that the Royal Canadian Mint of the Canadian government is the custodian of gold reserves that backs its digital representations.
- The increased acceptance of Bitcoin escalates its potential as a store of value.
Matador Technologies, a Canadian firm, has recently shifted to the Bitcoin Reserve Strategy as part of its treasury reserve management. The company envisions Bitcoin as a foundational element for its upcoming digital assets platform. This in turn allows the users to trade and store digital gold backed by physical reserve assets.
This will be initiated this month with a $4.5 million purchase. The move reflects the firm’s recognition of the potential of Bitcoin. BTC is used for the store value and as a hedge against currency devaluation. The current economic climate in Canada is facing multiple challenges. The nation heavily depends on oil exports, which has increased the national debt, resulting in the devaluation of its currency.
Matador Technologies has developed a platform on the network of Bitcoin that will help its users purchase and trade digital representations of gold within a single day. According to reports the platform is expected to be launched by early 2025.
The company was previously known as Scaling Capital. The company started trading on the TSX Venture Exchange under its new name last week. The company’s stock price dropped 35% from a closing price of $0.90 to $0.58.
In 2020, MicroStrategy started purchasing Bitcoin and, at the time of reporting, had amassed more than $41 billion. Major tech companies like Tesla also added Bitcoin to their balance sheets.
But some other firms like Microsoft are reusing to follow this strategy. Companies that follow in the footsteps of MicroStrategy are relatively small. Matador is on the pathway of MicroStrategy with a market capitalization of $ 49.5 million.
Matador stated in a press release that it has plans to release a mobile application that facilitates users to purchase, sell, and store gold 24/7. The website also states that the company plans to build a significant portfolio of products beyond these precious metals.
The board of directors of Matador unanimously approved the Bitcoin-buying endeavor of the company. As a part of this endeavor, the company would be shifting the majority of its cash balances into US dollars by giving up Canada’s official currency.
The Canadian firm stated it has considered other platforms like Ethereum and Solana. But Bitcoin was selected because of its secure and stable network. Matador stated that the Royal Canadian Mint, a corporation that is solely owned by the Canadian government is the custodian of gold reserves that backs its digital representations.
Matador President Sunny Ray stated that The board and management believe in the use of Bitcoin to future-proof their treasury. This step is to support the mission to explore the use of Bitcoin as a platform for products based on gold. According to Bitcoin Treasuries Japanese investment firm Metaplanet managed to create a $164 million stash since its first purchase in April. Both Metaplanet and Matador overlap beyond Bitcoin reserves.
BTC Inc. is the parent company of Bitcoin Magazine. It is known for hosting famous Bitcoin conferences. It also has an investment arm called UTXO Management. The cofounder and managing partner of this company Tyler Evans is also a part of Metaplanet’s board of directors.
Matador’s decision can be considered a part of an increasing trend among Canadian companies dependence on Bitcoin as a reserve asset. Companies are investing in Bitcoin to utilize its potential to act as a barrier against inflation and currency fluctuations.
The political climate that supports cryptocurrency in Canada also encouraged firms to adopt cryptos as a part of their financial strategies. The increased acceptance of cryptocurrencies like Bitcoin also makes it an attractive investment option for companies that plan to diversify their assets.
The trend of increasing acceptance of cryptocurrency could reshape the approach of asset management in business. This increased acceptance of Bitcoin can be considered as its increasing applications as a store of value.
Read more: Michael Saylor Predicts Bitcoin Reserve Could Generate $81 Trillion For The U.S.
