Mode, the bitcoin banking app that floated in London earlier this month, said it has allocated up to 10% of its cash reserves to purchase bitcoin and adopt it as a treasury reserve asset
Bitcoin rose to its highest point in a year as said it will enable cryptocurrencies on its platform and UK fintech PLC () announced that it was investing heavily in the cryptocurrency.
Mode, the bitcoin banking app that raised £7.5mln as it floated in London earlier this month, said it has allocated up to 10% of its cash reserves to purchase bitcoin and adopt it as a treasury reserve asset.
Bitcoin’s US dollar price today topped 12,700 for the first time since July last year amid growing positive news about the currency.
Following US banks receiving the regulatory green light to provide custody storage services for bitcoin and other cryptocurrencies in the summer, recent months have seen a US$50mln investment by US payment group () as it believes that cryptocurrency “provides a way for the world to participate in a global monetary system”, and a $425mln investment by business intelligence firm Microstrategy Inc (NASDAQ:MSTR).
PayPal said on Wednesday that it will enable cryptocurrencies on its platform, with users now able to add bitcoin, ethereum, bitcoin cash, and litecoin to their wallets, and use it for purchases.
This is part of Mode’s long-term goal to protect investors’ assets from currency debasement, it said, with UK interest rates at record lows and potentially turning negative.
Mode claimed to be the first publicly listed company in the UK to make public a significant purchase of bitcoin as part of its treasury investment strategy.
London investors do have access to other cryptocurrency plays, however, with bitcoin miner () last month reporting a 545% increase in bitcoins mined to 1,669 in the first half of the year, while digital assets investors () recently said there are “exciting times ahead” as the crypto markets enter a new bull cycle.
Mode, which is led by entrepreneur Jonathan Rowland whose Jellyworks investment company was famously bought out six months after debuting on the LSE in 2000, said it has long recognised the potential of bitcoin “as a reliable store of value and an attractive investment due to the asset’s asymmetric risk/reward attributes and safe haven status”.
Said Rowland: “We truly believe that Bitcoin is a vehicle for financial empowerment and, through Mode, investors can gain exposure to this highly attractive asset class through a listed and fully compliant company. Faced with the challenges of COVID and with UK interest rates at the lowest level in the ‘s 326-year history, our confidence in the long-term value of Bitcoin has only increased.”
The PayPal news could be a game-changer in the mass use of cryptocurrencies, said financial market analyst Neil Wilson at Markets.com, because of PayPal’s sheer scale and reach.
He cautioned that many other barriers to its widespread…