IT company NextTech has announced it will convert $2 million of its cash reserves into bitcoin.
The VR and AR provider thus joins a list of prominent major investors.
According to a press release from the Canadian company, NexTech plans to invest two million US dollars in Bitcoin. More investments in 2021 could follow. CEO Evan Gappelberg explained that the commitment is part of the company’s diversification and allocation strategy with the intention of maximizing long-term shareholder value.
Specifically, Gappelberg explained NextTech’s move as follows:
This initial investment reflects our belief that Bitcoin System is a long-term store of value with a higher appreciation potential than cash currently has, which currently yields 0.06 percent.
While digital gold has not yet reached the market capitalization of gold, which is ultimately several trillion U.S. dollars, the cryptocurrency is nevertheless well on its way to catching up with the precious metal sooner or later, not least due to its increasing recognition as a digital store of value.
2020 as a mega investment year in Bitcoin
With its planned investment in Bitcoin, NexTech joins a list of prominent major investors who have already invested in the cryptocurrency. In general, the digital store of value can look back on 2020 with satisfaction due to its still ongoing bull run.
MicroStrategy, for example, has invested over $1 billion in bitcoin so far. US insurer MassMutual also joined the crypto hype and put 100 million US dollars into the digital gold. Square Inc. also invested $50 million in the cryptocurrency so far. According to investment firm Pantera Capital, Square, along with PayPal, is already buying more than 100 percent of newly generated bitcoin holdings.
But it is not only companies that are participating more and more in Bitcoin. Large asset managers are also increasingly entering the crypto market. The Grayscale Bitcoin Trust, for example, currently manages a volume of 572,644 BTC. In November, Wall Street heavyweight Guggenheim Partners announced a $500 million investment in the Grayscale fund. According to Bitcoin Treasuries, all major investments made to date combine for 1,151,618 BTC. That’s about 5.5 percent of all bitcoin.
In fact, however, the value is likely even higher, as lost BTC, such as from lost private keys, would have to be subtracted from the 21 million. According to Chainalysis, the amount of Bitcoin lost over the years is around 3.7 million units. If the „lost coins“ are subtracted from the supply already in circulation, there are 15 million BTC left over according to Adam Ries. In this case, the big players already hold 7.68 percent of the total circulating supply.