Another company buying bitcoin as capital allocation strategy

[hugeblack]

The company name is: https://snappa.com/
It's nice to see more companies starting to think seriously about inflation.
I don't think it's news that will push the price forward, but it might give the average user an opportunity to rethink about their investment.


https://chrisgimmer.com/bitcoin-reserve-asset/

The article is long but well worth reading as it is an indication that they research well before considering investing.

[philipma1957]

The company name is: https://snappa.com/
It's nice to see more companies starting to think seriously about inflation.
I don't think it's news that will push the price forward, but it might give the average user an opportunity to rethink about their investment.


https://chrisgimmer.com/bitcoin-reserve-asset/

The article is long but well worth reading as it is an indication that they research well before considering investing.

 will read this later, but thank you for link.

[The Sceptical Chymist]

Snappa looks to be a very small, very new company.  If they've bought bitcoin to keep as their cash reserve, it's still nowhere near the importance of MicroStrategy doing the same in terms of newsworthiness.  Protonmail and Overstock.com also keep bitcoin in reserve too, as far as I know, so this isn't even a new "thing" except for the part where companies are buying and holding bitcoin instead of cash. 

I don't mean to downplay the importance of these stories, though.  I don't know if it's the best move for a corporation to be keeping an asset as volatile as bitcoin as its reserve form of money, but it certainly says a lot about how far bitcoin has come in terms of mainstream adoption.  It'll be interesting to see if these strategies work out well for the corporations that adopted them, and only time will tell.  If bitcoin crashes, I don't think the shareholders of MSTR or whoever owns Snappa are going to be very happy.

[alani123]

This would be more noteworthy if the research was coming from a hedge fund or someone more averse to finance in some way.
But a company offering services online trying to ring the bell about inflation isn't gonna cut it for me...

Currency competition among FIAT money would have existed either way, with bitcoin or not. Even right now, with a global crisis situation affecting the entire world and its economy, not all central banks follow the same strategies. In the U.S., USD lost some value as the government went way over budget with the FED essentially agreeing to print money and follow along. However, USD has mostly been losing value against EUR, with the ECB following an arguably much less aggressive strategy to protect Euro members from Coronavirus' effects.

It's good that an influential person in a company got enlightened towards BTC, but I don't see this as a trend to be honest.
Being a cash reserve for companies in my honest view isn't where BTC's peak utility can be drawn from.
Fintech in Europe for instance already has much better solutions that companies can utilize. Any company can put its cash in interest accounts all across the continent with a simple app, and utilize a much more rewarding no-risk investment this way. In theory, the U.S. could follow suit in that by loosening regulation on monetary transfers and by providing tools for banks to make wire transfers to certain countries abroad more frictionless. Bitcoin on the other hand, with all of its volatility, would put whatever company holds it in much more risk than inflation for USD ever had. This problem is already being handled to an extent by utilizing non-bank payment solutions. But I still think it's more likely that in the future we'll see more companies demanding better banking in the U.S. other than adopting BTC to hold.

[philipma1957]

 A lot of valid points. Anyone with 100k spare cash could consider holding 5 oz of gold and 1 btc keep the rest in cash. May not be the best guess but I think it is better than all cash.

[thesmallgod]

It is become necessary to diversify the business and not to rely solely on fiat. With daily news about inflation and possible economic met down due to the pandemic. It is a wise decision to do in order to mitigate the effect this hardship might bring if it eventually happens. I also wrote an article about a company that converted the business profit into crypto.

[Oasisman]

Though news like this is an essential thing for Bitcoin growth and adoption, but I doubt these companies who are considering Btc as their cash reserves may have heard a lot of bullish predictions about the $100k possible ATH in 2021. Because If you come to think of It, putting your reserved funds to Bitcoin, there is a very huge chance that you could lose more than 50% of your reserve funds when there's a heavy decline of Btc price, thus you'll never know when will It bounce back. Then comes an emergency where the company needs to spend the reserve. So, that basically bears a lot of risk.
During this time around when USD is failing and Btc is trying to make a run, I guess it's wise to switch to Btc than stay in fiat. But most likely these companies wouldn't put their reserve in Btc forever or after 2021 If there's a new recorded ATH.

[Finestream]

From the very first question of this article you shared, investors would already realize and would invest in bitcoin. I haven't read the whole article yet but I'm stuck with this;

Let me ask you a question…

Would you rather save money in a currency whose supply is inflating each year? Or would you rather save in a currency whose terminal supply is programmatically fixed?

I guess this is a good question that we should reflect on, we are too confident with the fiat system as a reserve which in reality it's inflating.
This small company knows the direction they are gong, they are diversifying the risk and they use crypto hedge the weakness of fiat in the long run.

If we are just smart, even at a small amount of bitcoin, we can start saving securing our future, I'm not saying we invest everything we have, but at least we also learn how to diversify in crypto.

[exstasie]

Let me ask you a question…

Would you rather save money in a currency whose supply is inflating each year? Or would you rather save in a currency whose terminal supply is programmatically fixed?

I guess this is a good question that we should reflect on, we are too confident with the fiat system as a reserve which in reality it's inflating.

In theory, you just need to beat the inflation rate, which is targeted at 2%. Most people don't keep their savings in cash, of course. A money market account or CD has terrible returns right now, 1% APY or less, but then again inflation is supposedly close to 0% so far this year. Higher inflation would usher in higher interest rates as well, at least in theory.

Of course, this ignores the ongoing asset bubble. The lack of returns in bond and treasury markets and, to be frank, the limited mid and long-term growth prospects for the overall economy, is driving speculative bubbles in risk assets.

Now companies are seeing they can not only grow their balance sheets and stock value through stock buybacks, but by investing in quickly growing risk assets like gold and BTC. Even if their company isn't actually growing, their balance sheet will be.

[yohananaomi]

The risk of inflation will always haunt investment in times of pandemic like this, but many experts also have an analysis that may differ from the opinion that is currently developing. people may still invest in gold with the assumption that he thinks might be the best, but on the one hand there are also those who think that investing in bitcoin is also very profitable, each investor will determine the direction that might be different from the perception of the experts. but all return to those who have the capital to determine it.

[Mauser]

On one hand, you have a group of people who think an ever expanding monetary base and increasing amounts of government debt doesn’t matter as long as “inflation” is low.

On the other hand, you have many people who believe that quantitative easing and increasing government debt levels are leading to asset price inflation and a widening wealth gap.

The article is very interesting. I definitely belong to the second group, as do most on this forum I assume. Always good to hear that more companies move into crypto currencies. I think that more and more companies will eventually realise that just relying on Fiat is not the way to go. In the long run this is just another factor for bitcoins to go up as most countries will keep continuing to expand their monetary base and government debt.

[Taskford]

On one hand, you have a group of people who think an ever expanding monetary base and increasing amounts of government debt doesn’t matter as long as “inflation” is low.

On the other hand, you have many people who believe that quantitative easing and increasing government debt levels are leading to asset price inflation and a widening wealth gap.

The article is very interesting. I definitely belong to the second group, as do most on this forum I assume. Always good to hear that more companies move into crypto currencies. I think that more and more companies will eventually realise that just relying on Fiat is not the way to go. In the long run this is just another factor for bitcoins to go up as most countries will keep continuing to expand their monetary base and government debt.

Its good adoption by them knowing bitcoins have great future and also had many advantage compare to traditional payment system. And I really think that there are more companies will follow but I also want to see that bitcoin will go on mainstream since this could trigger the historical adoption not only with Btc  but as well with top alts listed in the market.

[Lucius]

It may not be a company that most of us are familiar with, but as far as I can see, they have been providing tools for various graphic solutions since 2015, and they are successful in that. I also noticed that this is a very young team that is obviously not trapped in the shackles of the current systems, but is ready to accept some new solutions.

Whether this and recent cases are just exceptions, or whether some trend has been created is a really interesting question. What I'm pretty sure of is that there are a lot more cases like this that haven't and won't be exposed publicly, but obviously people are starting to realize what the benefits of Bitcoin are. The advantage of those who realized this 5 or even 10 years ago is more than obvious.

[Harlot]

~snip

Though there've certainly been better times in recent history, around about now will likely turn out to be a considerably better time than in a year or a bit more if things heat up. That's when we're going to see the highest number of companies doing it and it might become some sort of miniature bubble all of its own with stocks rising every time a company declares they have a position. Then it all goes tits up and takes them with it a very short time afterwards.

But we don't know how these companies will react to these kinds of price movement. Let say on one of these days BTC suddenly drop at 10%, there is a chance for these companies who have their cash reserves invested in Bitcoin will suddenly bail out of their position they will obviously be contributing to the price drop more. We are talking about companies who wants profits and I know that they aren't really sitting on their positions for too long in order for them to make a profit. Either way companies who are investing big in crypto will always be a double-edged sword as their capital can definitely affect the price movement of Bitcoin.

Here is my post that is somehow related to more and more companies buying Bitcoin as an investment. I personally don't see this as an all through out good news as companies having large portions of the current circulating supply in Bitcoin is always no good, they are technically whales that have the power to influence the market. Yes its good news that finally Bitcoin is being recognized on the commerce end but price movement wise we can be 50-50 because of them and how they see the price movement of Bitcoin.

[tomahawk9]

What I'm pretty sure of is that there are a lot more cases like this that haven't and won't be exposed publicly, but obviously people are starting to realize what the benefits of Bitcoin are. The advantage of those who realized this 5 or even 10 years ago is more than obvious.

Small companies won't make it (capital allocation strategies involving cryptocurrencies) public for two reason: 1) the stigma cryptos and specifically Bitcoin still have in the public eye, 2) the allocation is so small it's not even worth making it public,

having said that, and based on the size of this company called "snappa", i think this is a PR move, probably want to generate some noise and gain exposure and maybe get a gig or two from it? So I have to disagree with OP when he says:

it might give the average user an opportunity to rethink about their investment.

Unlikely. Average user as you call them don't even know what Snappa is, so why follow their footsteps? Only big companies may be able to achieve some sort of change in financial strategies and views in the general public

[sabbir2world]

The covid-19 has messed up the global economy resulting inflation in most of the countries. Government can print as much as they want to compensate the situations. That leads us to the blockchain industry. I think this is our future. ✌

[sunsilk]

The article has shown the stock-to-flow model. But, this is another good news for us. Whether the company will have a huge or small allocation in bitcoin, what matters is they are starting to invest and allocating in bitcoin.

It won't be long when other companies will also start to describe how good bitcoin is as an investment and, how will people who don't have knowledge about bitcoin but aware of inflation and what's currently happening in the world's economy.

[hatshepsut93]

Of course, this ignores the ongoing asset bubble. The lack of returns in bond and treasury markets and, to be frank, the limited mid and long-term growth prospects for the overall economy, is driving speculative bubbles in risk assets.

Now companies are seeing they can not only grow their balance sheets and stock value through stock buybacks, but by investing in quickly growing risk assets like gold and BTC. Even if their company isn't actually growing, their balance sheet will be.

I hope these companies put some stop-loss orders, cause it's so easy to get rekt, especially with Bitcoin. Last year it reached $13k and went to a bearish/sideways market for the rest of the year. This year it lost 50% in one day. If a company puts more than they can afford to lose in BTC, they might seriously screw themselves in such drop, cause they would end up with not enough funds to operate.

[Lucius]

Small companies won't make it (capital allocation strategies involving cryptocurrencies) public for two reason: 1) the stigma cryptos and specifically Bitcoin still have in the public eye, 2) the allocation is so small it's not even worth making it public,

This is true, yet Bitcoin still bears the stigma of some kind of internet fraud and is identified as multi-level marketing scheme or ransomware money. While anyone trying to figure out what this is about is likely to change their minds, people are still more likely to listen to the mainstream media and their politicians than to themselves. I myself have repeatedly felt on my skin very negative and offensive comments when I mentioned Bitcoin to acquaintances and friends, unfortunately nothing has changed about it in the last 4-5 years.

It's hard to comment on whether this is just a PR move or whether the company's team has really recognized the opportunity to allocate some of its money to Bitcoin - but still something positive is happening in that direction, and it is a known fact that small investors usually imitate big ones.

[ilovealtcoins]

They seem to have noticed bitcoin. Many institutional investors have come in and bought bitcoins for a long time without our knowledge. Bitcoin has quite a good price stability. In 2018-2020, although bitcoin has many fluctuations in value, in the end, bitcoin still has good growth. I think there will be more financial institutions investing in bitcoin this year and the future.