German publicly traded company shields itself from inflation by buying bitcoin

Key facts:

After the announcement, the shares experienced an increase of 27 euros.

According to the firm bitcoin is more secure and reliable than traditional currencies.

Synbiotic SE, based in Munich, Germany, announced its decision to invest in bitcoin due to “legitimate concern about a massive devaluation of fiat money.”

In a statement dated February 16, 2021, the company assures that this operation makes it the first company, listed on the German stock exchange, to protect itself from the devaluation of the euro using bitcoin.

Therefore, the company that operates in the medical cannabis sector has started to exchange part of its free liquidity in bitcoin. However, the amount of the operation is unknown until now.

In the document, he explained that the decision is not based on a desire to enter into price speculation, but “in light of the excessive monetary expansion that occurred in both the euro and dollar areas” due to the inorganic issuance of money that many governments have made in the framework of the coronavirus pandemic.

In this regard, Synbiotic SE CEO Lars Muller said the following:

Bitcoin is the exact antithesis of traditional currencies: its volume is limited to 21 million units. This limit is fixed and inviolable, which the decentralized organization of cryptocurrency and the tamper-proof nature of the blockchain in turn guarantees.

For this reason, we have more long-term confidence in bitcoin than in euros or dollars, where a central institution, influenced by politicians, can expand the money supply immeasurably.

Muller also noted that the company operates in the field of cannabis and cannabis-based products, and in this area there is “a very positive experience of using bitcoin as a simple and digital means of payment. In fact, several Synbiotic subsidiaries are already accepting payments in bitcoin in addition to the euro. ‘

Synbiotic shares are listed on the Düsseldorf Stock Exchange in Germany, as well as on the Deutche Börse’s Xetra trading platform, and rose. After the announcement they reached Tuesday February 16, 2021 a new maximum price of 27 euros, after three weeks. The figure equals $ 35.58.

Sinbyotic clarified that the decision to invest in bitcoin is part of a hedge plan against the fall of the fiat currency. Source:

Other companies in Germany have invested in Bitcoin

Despite his claim, Synbiotic not the first company to be listed on the German stock exchange who invests his money in bitcoin. It had already done so on January 6, 2021 Bitcoin Group SE, which is also listed on Xetra ,. This company injected capital into bitcoin and increased its cryptocurrency holdings to 100 million euros, which is equivalent to 120.6 million dollars.

This same line of action was also followed by the asset manager Ruffer Investment Company, which obtained on February 3, 2021 a $ 750 million profit on your bitcoin investment.

The London-based firm manages £ 20.3 billion, equivalent to $ 27.3 billion in assets, and allocated 2.5% of its Multi-Strategy Fund to bitcoin, in November 2020. According to its year-end review, the company also gained exposure to bitcoin, through two proxy stocks in MicroStrategy and Galaxy Digital.

Duncan McInnes, Ruffer’s chief investment officer, explained that the company decided to take out the amount it originally invested, making $ 650 million in profit and is now leaving the rest in bitcoin. “We still have about $ 700 left and we have now increased by $ 750 million in total,” he said.

Trend grows in the United States to adopt bitcoin as a reserve asset

On December 22, 2020, MicroStrategy was the first public company to adopt bitcoin as a primary reserve asset. That year it closed with almost $ 2 billion in bitcoin, as CriptoNoticias reported. The US publicly-traded business intelligence company made a new purchase for 29,646 bitcoins, at an average of USD 21,925 each, for a total investment of USD 649,988.55 million.

MicroStrategy, which formally adopted bitcoin as its main reserve asset in 2020, now has 70,470 total bitcoins.

The investment strategy continued to boom in the United States with Square. The company announced on November 9, 2020 that 80% of the latest earnings were thanks to bitcoin. The firm reported gains of 1,100% in the third quarter of 2020, compared to 2019. Its Cash App generated USD 1.63 billion in bitcoin sales to its users and USD 32 million of gross profit during the third quarter of 2020.

At the time of writing this note, the price of bitcoin is USD 53,703, with a volume traded in the last 24 hours of USD 87,391 million.