In brief
- A Regina-based condo corporation has invested in Bitcoin, hoping to become fully self-sustainable in the future.
- The company says it sees a 10-year horizon for its crypto investment.
It's not just multinationals making multi-billion dollar Bitcoin buys; smaller firms are also setting their sights on the cryptocurrency as a potential store of value. Canadian property company Thornton Place Condominium Corp. has joined the growing list of businesses adding Bitcoin to their portfolio; the firm has purchased 0.4 BTC for its reserve fund.
Additionally, according to a recent announcement, Thornton Place has allocated a further CA$700.00 ($563) for future monthly investments in Bitcoin “on an ongoing and indefinite basis.”
"Our Board determined that a small investment of approximately 5% of the overall Reserve Fund and 6% of the monthly Operating Fund contributions into Bitcoin will permit Thornton Place to gain a limited exposure to a high-performing asset class without jeopardizing any of the long-term goals of the corporation and its owners,” the firm said in a statement.
Thornton Place stressed that instead of turning to a custody service provider or an exchange-traded fund, which comes with a management fee, it decided to make a direct physical purchase of the cryptocurrency—which amounted to CA$25,000 ($20,110) in cash—using crypto exchange Kraken. The company claims it is the first condominium or strata corporation in Canada to do so.
A 10-year time horizon
Reportedly, Thornton Place sees its investment in Bitcoin as a means of potentially eliminating residents' condominium fees, although critics including the Bank of America have slammed the cryptocurrency as being too volatile to function as a store of wealth.
Nevertheless, Thornton Place says it sees “a 10-year time horizon for the investment” with the ultimate goal of becoming “entirely self-sustaining” real estate.
Bank of America Slams Bitcoin in Research Note
Bank of America, the second-largest bank in the US, slammed Bitcoin in a recent note to clients and questioned the environmental implications of maintaining the asset. Per financial publication The Street this morning, the report, titled “Bitcoin’s Dirty Little Secrets,” argued that Bitcoin had little role to play in an investor’s portfolio. "Bitcoin has also become correlated to risk assets, it is not tied to inflation, and remains exceptionally volatile, making it impractical as a store of we...
According to Thornton’s board treasurer Howard Ulmer, the company’s Bitcoin investment was designed to be conservative and long-term, in order to mitigate against potential risks.
"It appears that this may be a more stable time for investment in Bitcoin currency. And the last number of years have been a considerable amount of fluctuation, and that doesn't mean it can't happen some more. But at least it appears to be a bit more stable," he told CBC.
Thornton’s purchase of Bitcoin may look insignificant when compared to recent investments made by multinationals including Tesla and Norwegian Aker ASA; however, it could point to a potential new wave of investment in the cryptocurrency from smaller companies.
