Bitcoin BTC and USD bills – negative interest rates?
After MicroStrategy and Square, GreenPro Capital is now the next NASDAQ company to invest in Bitcoin. In doing so, the strategy of MicroStrategy is to be adopted; thus, the company wants to raise outside capital in order to use it to buy Bitcoin Billionaire in the amount of 100 million US dollars. A risky investment?
$100 million purchase from GreenPro Capital
GreenPro Capital is a business advisory and investment firm. The company is traded on the NASDAQ stock exchange in the United States under the symbol GRNQ. After the two pioneers MicroStrategy and Square, GreenPro Capital now also wants to buy Bitcoin.
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A publicly traded company has announced that they plan to raise $100 million in debt to buy Bitcoin, copying MicroStrategy’s strategy.
The Malaysian division of GreenPro Capital (NASDAQ:GRNQ), a management consulting and investment firm, said they plan to invest some of their holdings as well. On the part of the company, it said:
GRNQ believes that BTC and other top cryptocurrencies like Ethereum ‚ETH‘ offer the opportunity to generate better returns than cash and not only preserve the value of our capital over time.
However, in doing so, the dimension in which the company wants to buy Bitcoin turns out to be risky. The following look at the balance sheet shows that the ratio of market capitalization to bitcoin purchase is quite risky.
Capitalpro Balance Sheet
A risky bet by GreenPro Capital?
Therefore, it remains to be seen whether the firm can actually raise the necessary funds that would be needed for such a large investment in Bitcoin. CK Lee, the firm’s CEO, commented:
We strongly believe in BTC as a store of value. I have instructed our investment bankers to raise up to $100 million in debt capital in the first quarter of 2021 to invest in BTC. The company will also invest its own cash in BTC.
GreenPro Capital is thus the next NASDAQ company after MicroStrategy and Square to invest in Bitcoin and consider the cryptocurrency as part of a diversified investment strategy. Interesting here is especially the aspect. that GreenPro Capital uses not only equity, but similar to MicroStrategy, also debt capital to invest in Bitcoin.
This previous bet work(s) splendidly for MicroStrategy: thus, their $1 billion investment has now grown to $2 billion, which has done wonders for the stock price, which has risen from $100 to $425. MicroStrategy’s investment in Bitcoin rivals Bitcoin itself in terms of sheer performance,
The fact is that this decision will also lead to a change in company policy in the medium term. More companies will ask themselves whether they should not hold their capital holdings in Bitcoin in addition to their Euros and Dollars.