The third in the world! UK-listed company Mode announces using 10% of its cash reserves to purchase Bitcoin
Following Square and Microstrategy, London Stock Exchange (LSE) listed company Mode announced that it will allocate 10% of its cash reserves to purchase Bitcoin as a reserve asset to hedge against macroeconomic risks.
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UK Publicly Listed Company Announces Bitcoin Purchase
Financial technology company Mode Global Holdings PLC, listed on the London Stock Exchange (LSE), announced today that it has allocated 10% of its cash reserves to purchase Bitcoin as a reserve asset to hedge against risks. Mode stated that this move is part of the company's long-term investment strategy to protect investor assets from currency devaluation.
Mode becomes the first UK and the third global publicly listed company to announce the purchase of Bitcoin as a long-term investment asset. Prior to this, Square and Microstrategy had respectively purchased Bitcoin worth $50 million and $425 million. Mode CEO Jonathan Rowland stated:
"The decision to allocate part of our cash reserves to Bitcoin is the next step in realizing our true potential with the digital financial services business mission, ... With the challenges presented by COVID-19 and the Bank of England's lowest interest rates in its 326-year history, our confidence in the long-term value of Bitcoin has only increased. Today's allocation of funds is executed through a modern, forward-thinking, yet prudent treasury management strategy."
In fact, compared to Square and Microstrategy, it is not surprising that Mode has used cash reserves to purchase Bitcoin. As a financial technology startup, Mode has been offering Bitcoin purchase and payment services early on, demonstrating a deep understanding of Bitcoin and a strong connection to the cryptocurrency field. Nevertheless, this is still a very encouraging development for the cryptocurrency industry.
Bank of England Considering Further Economic Stimulus Measures
The decision made by a UK company may be closely related to the current monetary policy in the UK. According to a report by the London Evening Standard, the Bank of England seems poised to inject more funds into the struggling economy.
Gertjan Vlieghe, one of the nine members of the Bank of England's Monetary Policy Committee, hinted in an interview that there could be further economic stimulus measures. Vlieghe, a former assistant to the ex-Bank chief Mervyn King, also added:
"Given the recent increase in virus prevalence, the pandemic may put greater pressure on economic activity. Indeed, the downside risks to the economic outlook seem to be materializing."
So far, the UK's economic stimulus measures have reached £725 billion. However, according to Reuters economists, the country is expected to add another £100 billion by early November. Additionally, the Bank of England has hinted that it may further reduce the benchmark interest rate from the current record-low of 0.10% to zero or lower. In this context, Mode's decision to convert 10% of its cash into Bitcoin does not seem surprising.
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