MicroStrategy’s Bitcoin treasury playbook has now spread to Canada, with a local crypto-focused public company embracing Bitcoin as its “primary treasury reserve asset.”
DeFi Technologies, which trades on Cboe Canada under the “DEFI” ticker, is next in a growing list of global public companies to go big on BTC—and for remarkably similar reasons to its predecessors.
“DeFi Technologies believes [Bitcoin] has unique characteristics as a scarce and finite asset, making it a reasonable hedge against inflation and a haven from monetary debasement,” wrote DeFi Technologies in a Monday press release.
To kick off its new strategy, the company announced the purchase of 110 BTC, worth CAD $10.5 million (USD $7.6 million) as of writing. Following the news, the firm’s stock rose 26% on Monday to CAD $2.01, bringing its total market cap to $588 million.
However, DeFi Technologies is not entirely copying MicroStrategy and MetaPlanet’s techniques. In a message to Decrypt, the company confirmed that it does not plan to use share dilution or loans to acquire more BTC. They also said they have no current plans to add more crypto to its balance sheet aside from BTC.
“The company has a large cash position on its balance sheet and views Bitcoin as a reasonable hedge against inflation and a safe haven from monetary debasement,” the firm said. “As the best-performing asset over the past decade, Bitcoin offers significant short to long-term potential to expand the company's treasury.”
As its name suggests, DeFi Technologies is already a crypto-native player, providing various crypto-related investment products including various exchange-traded products (ETPs) along with “strategic ventures and critical Web3 infrastructure,” according to its website.
Valour, the firm’s asset management-focused subsidiary, holds CAD $837 million in assets under management across its various ETPs—one of which includes a new Bitcoin ETP that claims to pay investors a 5.65% annual yield.
“Given the significant value gap between Bitcoin and other traditional assets, DeFi Technologies believes Bitcoin has the potential to generate outsized returns as it gains increasing acceptance,” the company added.
DeFi Technologies is also the owner of the crypto market research firm Reflexivity Research, which was co-founded by popular Bitcoin influencers Will Clemente and Anthony Pompliano.
“DeFi Technologies has adopted Bitcoin as its primary treasury reserve asset, purchasing 110 Bitcoins to initiate this strategy, reflecting confidence in Bitcoin's protection from monetary debasement and potential to expand the Company's treasury.”
Bitcoin is slowly seeping into…
— Pomp 🌪 (@APompliano) June 10, 2024
“Bitcoin is slowly seeping into public company treasuries around the world,” tweeted Pompliano, who is now founder of Pomp Investments. “We remain shareholders of DeFi Technologies ($DEFTF) and believe the business is still undervalued.”
MicroStrategy pioneered the model of holding a sizable amount of Bitcoin in its treasury as a reserve asset, and has since grown into the largest corporate holder with 214,400 BTC—about $15 billion worth at the current price.
Back in April, public Japanese firm MetaPlanet also made Bitcoin its treasury reserve asset of choice, and saw record-breaking gains in its stock price as a result.
Last week, healthcare product company Semler Scientific announced plans to buy up to $150 million in BTC following an initial $57 million buy last month. Likewise, SMLR stock is up 63% in the past 30 days.
Updated to add comment from DeFi Technologies. Edited by Andrew Hayward