Cryptocurrencies are here to stay, and are slowly beginning to have an impact outside of finance and investing. While more and more people learn about Bitcoin and other cryptos with a view0 to putting their money into these tokens, we are seeing crypto being used in various sectors to solve problems, both through the tokens themselves as well as the underlying blockchain network. This seems to be the way forward for the crypto industry, as it provides solutions for long-standing issues, and this example from Canada is just the latest one in this regard.
Various large companies and institutions have been putting money into Bitcoin over the last few months, but even smaller companies are looking at the crypto token as a potential store of value. The Canadian property company Thornton Place is one such entity, that has recently bought 0.4 BTC as part of its reserve fund. It has also allocated CA$700 towards monthly Bitcoin purchases on an indefinite basis. This investment represents 5% of its overall reserve fund, and 6% of its monthly operating fund, with a view towards gaining exposure to a high-performing asset class but in a limited manner so as to not jeopardize the firm’s long term objectives and financial health. This purchase amounted to CA$25,000, and the firm decided to opt for a direct purchase rather than going for an exchange-traded fund or a custody manager. The transaction was made through the crypto exchange Kraken, and this makes it the first condominium company in Canada to purchase Bitcoin.
This reflects a growing trend of companies and businesses putting their money into cryptocurrencies, with a view to either taking advantage of price increases, or to provide some strategic value to the business. Thornton Place’s investment is an example of the former, while there have also been instances of the latter, most notably in the online gambling industry. Various online gambling operators in Canada and elsewhere have been using blockchain and crypto to create a strategic advantage for themselves. These operators are offering users the option of placing bets on their websites through crypto, which is understandably extremely attractive. You can visit this site for Canadian players to enjoy crypto gambling, which has completely transformed the traditional online gambling industry.
Thornton Place sees Bitcoin as a potential way of removing residents’ condominium fees, although some critics have stated that Bitcoin is too volatile to be considered a store of value, and fluctuations can cause a lot of issues in terms of valuations. Thornton Place has a 10-year horizon for this investment, with the ultimate goal of becoming a self-sustaining business. The board decided to go for a longer time period and invest a relatively small percentage of their reserve fund in Bitcoin due to these concerns, since it would allow for the cryptocurrency to stabilise over time, while the small stake would mean that the long-term financial health of the company would not be damaged even if Bitcoin was to crash. It is therefore a conservative investment in a high-risk, high-return asset, and those who have studied asset management will agree that this was the right approach to take for the company.
This investment is of course a small one and pales in significance to the amounts bought by the likes of Tesla and Square, among others. However, it is an important milestone, since it signals that even small corporations and businesses are looking at Bitcoin as a potential store of value, and we could see investments of this nature increase in the near future, not just in Canada but all around the world as more and more investors are drawn towards Bitcoin and other cryptocurrencies.