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- The Ottawa based graphics software firm Snappa announced joining the bandwagon of corporate converting cash reserves into Bitcoin.
- Gimmer raised questions whether it is wiser to save money in a currency whose supply is inflating every year, or in a currency whose supply is programmatically fixed.
- Gimmer’s company has chosen to adopt Bitcoin as a primary reserve asset on its balance sheet.
MicroStrategy’s recent purchase of 21,454 Bitcoin worth $250 million, has further reinforced experts’ conviction that corporates relying on Bitcoin will impact the number one cryptocurrency’s valuation in a positive way. As MicroStrategy CEO Michael Saylor stated, Bitcoin is ‘digital gold’, and has proved its potential as ‘harder, stronger, faster, and smarter’ than any other form of money which has preceded it. The firm’s Bitcoin purchase is also a reflection of the faith of industry leaders in Bitcoin –a cryptocurrency with better long-term appreciation potential than cash.
Bitcoin over cash
On August 24, The decision was shared by Christopher Gimmer in a blog post titled “Why We’re Holding Bitcoin as a Reserve Asset.” Additionally, Gimmer also spoke to journalist Zack Voell in a private chat, sharing that Snappa allocated 40% of cash reserves in crypto asset.
In the blog, he raised questions whether it is wiser to save money in a currency whose supply is inflating every year, or in a currency whose supply is programmatically fixed. He continue by saying that the company realized that this was a significant and vital consideration when the firm’s bank slashed the interest rate of ’0.45% on Snappa earlier to this year.
Declining dollar value
In the blog, Gimmer further draws attention to the declining value of Canadian and US dollars post inflationary adjustments, and roots for ‘far superior savings technology available to us’. Needless to say, that technology is Bitcoin.
The economic turbulence induced by the pandemic, unstability of fiat money and Bitcoin’s digital scarcity are some major factors contributing to this move. The Snappa co-founder also highlighted the possibility of being able to actually measure Bitcoin’s Stock to Flow model with absolute certainty at any given point in time.
Making safe choices with cryptocurrency
He further stated that while many believe that quantitative easing (QE) and the government’s debt manipulation will lead to asset price inflation and an increasing wealth gap, this trend of money creation and the devaluing of fiat currencies will continue.
Citing these reasons, Gimmer concluded that in order to hedge this risk, his company has chosen to adopt Bitcoin as a primary reserve asset on its balance sheet. The initial 40% allocation is only the beginning for the seven-person startup, Gimmer told CoinDesk. The company is in the process of accumulating more coins, and doesn’t plan on selling anytime soon.
