NexTech plans US$2 million investment in bitcoin
IT company NextTech has announced it will convert two million US dollars 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. Further investments in 2021 could follow. CEO Evan Gappelberg explained that the Crypto Bank commitment is part of the company’s diversification and allocation strategy with the intention of maximising shareholder value over the long term. Specifically, Gappelberg explained NextTech’s move as follows:
‚This initial investment reflects our belief that Bitcoin is a long-term store of value with a higher appreciation potential than cash currently has, which currently yields 0.06 per cent.‘
Although digital gold has not yet reached the market capitalisation of gold, which is ultimately several trillion US dollars, the cryptocurrency is on track to catch 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 large 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 one billion US dollars in Bitcoin so far. US insurer MassMutual also joined the crypto hype and put 100 million US dollars into digital gold. Square Inc. has also invested 50 million US dollars in the cryptocurrency so far. According to the investment company Pantera Capital, Square, together with PayPal, is already buying up over 100 per cent of the 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 so far combine for 1,151,618 BTC. That is about 5.5 per cent of all Bitcoin. In fact, however, the value is likely to be even higher, as lost BTC, for example through lost private keys, would have to be deducted from the 21 million. According to Chainalysis, the amount of bitcoin lost over the years is around 3.7 million units. If one subtracts the „lost coins“ 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.