DeFi Technologies Adopts Bitcoin as Primary Reserve Asset

DeFi Technologies, a crypto-focused public company based in Canada, has officially adopted Bitcoin as its “primary treasury reserve asset,” following a path similar to MicroStrategy and other global firms. The company, which trades under the “DEFI” ticker on Cboe Canada, announced the purchase of 110 BTC valued at approximately CAD $10.5 million (USD $7.6 million). This strategic move resulted in a notable 26% rise in its stock price to CAD $2.01, pushing its market cap to $588 million.

Unlike its predecessors such as MicroStrategy and MetaPlanet, DeFi Technologies is taking a different approach to enhancing its Bitcoin holdings. The company clarified that it would not employ share dilution or loans for acquiring additional BTC, nor does it currently plan to expand its crypto assets beyond Bitcoin.

DeFi Technologies highlighted Bitcoin’s qualities as a “scarce and finite asset” as key reasons for its choice, viewing it as an effective hedge against inflation and a safeguard against monetary debasement. With Bitcoin being the best-performing asset over the last decade, the firm sees significant potential for both short and long-term growth in its treasury.

The firm operates within the cryptocurrency sector, offering a variety of crypto-related investment products, including exchange-traded products (ETPs) and services aimed at strategic ventures and critical Web3 infrastructure. Its subsidiary, Valour, manages CAD $837 million in assets, featuring a new Bitcoin ETP that offers a 5.65% annual yield to investors.

DeFi Technologies believes that Bitcoin holds the potential for outsized returns as it continues to gain broader acceptance compared to traditional assets. This belief is underscored by the involvement of prominent Bitcoin influencers like Will Clemente and Anthony Pompliano, co-founders of Reflexivity Research, a market research firm owned by DeFi Technologies.

Anthony Pompliano, a major shareholder through Pomp Investments, praised the company’s strategic move on Twitter, stating, “Bitcoin is slowly seeping into public company treasuries around the world,” and expressed his belief that DeFi Technologies is still undervalued.

This trend of incorporating Bitcoin into corporate treasuries was spearheaded by MicroStrategy, which has amassed 214,400 BTC, making it the largest corporate holder of Bitcoin valued at about $15 billion. Other companies like Japan’s MetaPlanet and U.S.-based Semler Scientific have also recently adopted Bitcoin as a treasury reserve asset, experiencing substantial stock price gains following their announcements.

DeFi Technologies’ move marks a significant step in the ongoing integration of cryptocurrencies into mainstream corporate finance, signaling a robust confidence in Bitcoin as a stable and valuable reserve asset.