With inflation rocking several parts of the world due to the coronavirus (COVID-19) pandemic, popular online graphic platform, Snappa, has revealed that it had been accumulating Bitcoin (BTC) as part of its reserve asset since March.
Christopher Gimmer, the co-founder of Snappa, said yesterday that the initiative became imperative when the Bank of Canada slashed the interest rate of its savings account to a paltry 0.45% earlier this year.
He believed the country’s apex bank’s decision would negatively affect the Canadian dollars (CAD), thus reducing its purchasing power.
In a bid to look for a better alternative that preserves the currency’s purchasing power over time, the Canadian firm committed several hours into researching about Bitcoin and has kept accumulating the asset since March 2020.
“[Bitcoin] now makes up a significant percentage of our company’s overall cash reserves,” Gimmer said.
Snappa chooses Bitcoin over Gold
According to Gimmer, a few factors, especially Bitcoin’s fixed supply of 21 million coins, prompted Snappa to choose Bitcoin as its reserve assets over the popular traditional asset, gold.
He noted that Bitcoin is programmed to cause digital scarcity via halving over time and would continue to boost its value ahead of gold, which keeps “getting less scarce.”
Since gold is estimated to have a total supply of 190,000 tons, with 3,260 tons of new supply coming into the market yearly, Grimmer said both Bitcoin and gold have almost the same stock to flow value, judging by BTC’s most recent halving.
Grimmer added that Bitcoin would be more scarce and valuable than gold by 2024 when the next halving will take place.
Even though the CEO did not indicate how much BTC Snappa has, it is evident that the firm will keep accumulating the asset to mitigate the impact of the current economic situation.
Snappa is not the only mainstream company to choose Bitcoin as its reserve asset. Coinfomania reported earlier this month that business intelligence software giant MicroStrategy purchased about $250 million worth of BTC as part of its primary reserve to boost the company’s share buyback capabilities.