NexTech AR Solutions is the latest company to convert part of its cash reserves into Bitcoin.
The augmented reality company is buying $2 million in BTC and may add more later.
This year, several notable companies and institutions have adopted Bitcoin as a hedge against macroeconomic uncertainty.
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Canadian augmented reality (AR) company NexTech AR Solutions is preparing to Crypto Bank review become the latest company to use a portion of its cash reserve to purchase bitcoin. NexTech AR plans to purchase $2 million worth of cryptography.
The company joins several others in deciding to convert their reserves to BTC. Purchases by companies such as MicroStrategy also appear to have triggered the recent upward movement in Bitcoin’s price.
Another company chooses Bitcoin to protect its funds
This year’s turbulent global economic situation inspired another company to protect its funds through Bitcoin. According to a press release on Tuesday, the Vancouver-based augmented reality company said it would make an initial investment of $2 million.
The Canadian company also said it may purchase more bitcoin at a later date. Evan Gappelberg, CEO of NexTech AR, commented on the decision:
This initial investment reflects our belief that Bitcoin is a long-term store of value and an attractive investment asset with greater long-term appreciation potential than holding cash, which currently yields 0.06%.
Gappelberg added that Bitcoin is becoming a digital alternative to gold. Making comparisons between gold’s $10 trillion market capitalisation and Bitcoin’s $500 million, the CEO said Bitcoin had more room to manoeuvre.
The year of institutional investment in BTC
NexTech AR is the latest in a series of companies that are buying BTC with their cash reserves. Earlier in 2020, MicroStrategy surprised observers of the cryptographic industry with a significant investment.Beginning in August, the company announced several purchases that resulted in the sale of $650 million in convertible senior notes. The proceeds were spent on more Bitcoins, bringing the company’s total holdings to more than $1 billion.
After MicroStrategy, Jack Dorsey’s payment company, Square. In October, he bought $50 million worth of BTC using its reserves.
Even later, Massachusetts-based life insurer MassMutual announced its own investment. The nearly 170-year-old company diversified $100 million of its more than $275 billion in Bitcoin assets under management (AUM) earlier this month.
A new class of investors is taking BTC to new heights?
MicroStrategy’s first bold purchase of BTC in August appears to have inspired a new wave of corporate Bitcoin hodlers. Those announcing similar purchases are all citing fears of a weakening dollar that will depreciate their reserves.
The growth in institutional purchases may have coincided with the recent price action that saw BTC move into the USD 20,000-30,000 range. Bitcoin was trading below $12,000 when MicroStrategy announced its first purchase.
Over the past four months, the price has risen by more than 135%. At the time of writing, BTC is trading around $26,800, not far from its recent historical high of $28,335 reached on December 27.