Coronavirus Pandemic Forcing Canadian Companies to Shift Base Into Bitcoin 

With global economies teetering on the brink of recession and governments doing what they can to keep things stable, companies are starting to see the wisdom in embracing cryptocurrencies. While many counsel restraint, some companies have chosen to go all-in on the industry. In Canada, two such companies have emerged.

Dreading the Continued Price Manipulation

Yesterday, graphics solution provider Snappa announced that it had put a “significant portion” of its total assets in Bitcoin. In a blog post, company chief executive Christopher Gimmer explained that they started accumulating Bitcoin when the coronavirus pandemic hit in March.

Gimmer pointed out that they didn’t just make an impulsive move to hold Bitcoin. Instead, they had spent a great deal of time analyzing the asset and the game theory behind it. They eventually found that Bitcoin was a solid investment and took the plunge.

The CEO also pointed out that constant currency manipulation from the U.S. and Canadian governments had made them worried. He claimed that Snappa’s banking partner had cut interest rates on their accounts to 0.45 percent.

Since Bitcoin’s purchasing power can’t be adjusted for inflation, holding Bitcoin would allow the company to scale and produce higher amounts of free cash flow. Snappa’s announcement came days after Tahini’s — the self-proclaimed “best Middle-Eastern restaurant in the world.” The company, which operates four corporate locations across the country, explained in a Twitter thread that it had also moved its entire asset base to Bitcoin when the pandemic hit.

The restaurant had seen that the Canadian government was pumping money into the economy to maintain liquidity and prevent business closures. While they understood the rationale, they also knew its implications.

Snappa and Tahini’s Score Big

Canada’s government has acted similarly to that of the United States, providing economic palliatives to companies and workers whose livelihoods had been affected by the pandemic. On March 25, the Department of Finance announced a relief package that paid $2,000 monthly for about four months for anyone who lost their job due to the pandemic.

Tahini’s owner, Oman Haman, explained that the government couldn’t possibly keep this going forever. Instead of waiting for the economic fallout from such a problem, he decided to secure his company’s funds. 

“As time went on I was constantly trying to learn and grow my knowledge about finance. I heard people in the Bitcoin community saying you have to hear about Bitcoin at least 7 times before you get into it. 100% accurate,” he explained.

Both companies have done quite well for themselves since then. Bitcoin was worth about $6,725 when the Canadian government rolled out its economic relief plan and has risen to over $11,000 today. Thus, their holdings would have surged by over 60 percent in value since then.

Both companies have shown that Bitcoin can serve as a hedge against financial uncertainty — a point that was recently re-emphasized by George Ball, the former chief executive of Prudential Securities.

In an interview with Reuters, Ball explained that he had come to see Bitcoin’s long and short-term potential as a hedge asset. Given that governments can only pump money into the economy for so long, he explained that cryptocurrencies’ immunity to price manipulation gave them a significant advantage.