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A company listed on the London Stock Exchange allocated 10% of its cash reserves to Bitcoin as its main treasury reserve asset.

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A growing number of institutional investors and traditional companies are holding the flagship cryptocurrency as a treasury reserve asset amid an economic recession due to the pandemic.

The latest company to jump on the bitcoin bandwagon is a London Stock Exchange-listed fintech company, Mode Global Holdings. However, Mode has not disclosed the dollar value of its investment in bitcoin.

Another public corporation bets on Bitcoin

Mode has become the first publicly traded company in the UK to exchange a portion of its cash reserves for bitcoin, according to a Press release Wednesday.

Mode says that it has allocated 10% of its cash reserves to the main cryptocurrency as its treasury reserve asset. The purchase is part of the company's "long-term goal of protecting investors' assets from currency degradation."

The foundation of the company depends primarily on bitcoin's ability to maximize the value of the returns from its recent fundraiser. Mode noted that interest rates in the UK are currently at a record low of 0.1%. Therefore, the company seeks to diversify away from low-interest money market instruments.

Commenting on the bitcoin allocation, Mode CEO Jonathan Rowland stated:

“We truly believe that Bitcoin is a vehicle for financial empowerment and through Mode, investors can gain exposure to this very attractive asset class through a fully compliant, publicly traded company. Faced with the challenges of COVID and with UK interest rates at the lowest in the Bank of England's 326-year history, our confidence in the long-term value of Bitcoin has only increased. Today's allocation is executed through a modern, forward-looking but prudent treasury management strategy. "

Mode further noted that it recognizes bitcoin's potential as a store of value due to its unique risk / reward attributes and safe haven status. The company has even created an easy-to-use mobile app that allows people to buy, sell, and hold bitcoin. This application also allows users to generate interest in their bitcoin holdings.

With this move, Mode joins companies like Stone Ridge, Square, and MicroStrategy who have also diverted their cash assets to bitcoin. Stone Ridge bought $ 115 million worth of bitcoin last week, while Square bought about $ 50 million worth of bitcoin earlier this month. MicroStrategy invested 425 million in BTC in August and September.

Bitcoin, which offers a hedge against the weakening dollar and general economic uncertainty, is likely to become a staple in more companies' portfolios in the future.





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