On Wednesday last week, we announced that we allocated a significant portion of our cash reserves to purchase Bitcoin and adopt it as a treasury reserve asset. We wanted to take this opportunity to dive deeper into why we took this decision, and address some of the questions our customers and investors have asked us.
To answer why we made this decision, we must first explain another why – why we believe in Bitcoin. At Mode, we recognise the potential of Bitcoin as a reliable store of value whose scarcity make it a great hedge against political and economic instability. Amidst the financial crisis of 2009, Bitcoin’s arrival shed light on the flaws of the current financial system and offered a solution to many of the issues the crisis uncovered. Both the mathematical beauty of Bitcoin and its functional capacity created unprecedented value for the asset, and its popularity as a store of wealth has continued to increase. It became our goal from day one to accelerate this adoption and build products that enable everyday investors to access the benefits of this revolutionary asset in a secure and seamless way. As of today, we can proudly say we have built one of the most easy-to-use mobile applications in the market that allows people to easily buy, sell and hold Bitcoin and grow their holdings via one of the highest-yielding and most flexible, interest-generating products for Bitcoin on the market.
Bitcoin as a reserve asset
Let’s return to the question of why we decided to adopt Bitcoin as an asset to hold as part of our cash reserves. The simple answer is, we put our money where our mouth is. We firmly see Bitcoin as a vehicle for financial empowerment, and our confidence in its long-term value has only grown in response to the challenges of COVID and the uncertain global economic situation. The decision to allocate up to 10% of our cash reserves to purchase Bitcoin as part of our treasury strategy came naturally as we look for ways to protect our investors’ assets from currency debasement (the process by which a currency loses value, often as a result of quantitative easing or “money printing”). We consider our decision to be an innovative but prudent treasury strategy, which is supported by our partners Coinbase for OTC trading and BitGo for the safeguarding of the Bitcoin.
Transparency has always been at the top of our minds, and that’s one of the main reasons why we chose to IPO earlier this month. Some of you have asked why an IPO and not remain private and seek VC funding like most fintechs? We knew it was an ambitious plan and that the FCA would take out their magnifying glass and heavily scrutinise our business model due to our exposure to Bitcoin. However, we reminded ourselves of what we wanted to achieve, and it was to give people the chance to own a piece of the future. Furthermore, we reasoned that if we could show to the world that we could get the most advanced financial regulator and most reputable stock exchange in the world, the FCA and UKLA, comfortable, then that would mean we could finally embark on our mission to build the next-generation financial ecosystem that brings together the best of digital assets, payments, investment and loyalty.
Democratising opportunity and access
Our conservative £40m valuation post-IPO provided an attractive opportunity for investors to get involved, investors that otherwise are usually shut out from the multi-billion fintech investment opportunities that only the most select VC funds have access to.
That spirit of open access and opportunity runs through our DNA. At Mode, we believe in building accessibility, transparency and credibility around digital assets, and we are proud to follow in the footsteps of other companies such as Square and Microstrategy.
In due course, we believe that financial services will see an unprecedented wave of democratisation and inclusion. In addition to boosting access to digital assets, we plan to leverage Open Banking, in order to build a new payments ecosystem that serves businesses and customers better, eliminating the need for cards and reducing fees. Digital assets, payments, investment, and loyalty, all combined and improved, by Mode.
On behalf of Mode’s board and executive team, we would like to thank all Mode customers, investors and supporters for their unconditional backing and support. Someone once said: Great things await when you have great people around you. We cannot wait to share more exciting news with you very soon.
Read our official press release “Mode adopts Bitcoin as a reserve asset” here: https://www.londonstockexchange.com/news-article/MODE/mode-adopts-bitcoin-as-treasury-reserve-asset/14726646