After MicroStrategy and Square, GreenPro Capital is the next NASDAQ company to invest in Bitcoin. The strategy is to be adopted by MicroStrategy; the company wants to borrow money to buy Bitcoin worth $ 100 million. Risky Investment?
$ 100 million purchase of GreenPro Capital
GreenPro Capital is a management consulting and investment firm. The company is traded under the symbol GRNQ on the American stock exchange NASDAQ. After the two pioneers MicroStrategy and Square, GreenPro Capital now also wants to buy Bitcoin.
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A public company has announced that it plans to run into $ 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. The company says:
GRNQ believes that BTC and other top cryptocurrencies like Ethereum offer ‚ETH‘ the opportunity to generate better returns than cash and not just maintain the value of our capital over time.
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 relationship between market capitalization and Bitcoin purchase is quite daring.
A risky bet from GreenPro Capital?
Therefore, it remains to be seen whether the company can actually raise the necessary funds that would be needed for such a large investment in Bitcoin. CK Lee, the company’s CEO, said:
We strongly believe in BTC as a store of value. I have directed our investment bankers to borrow up to $ 100 million in the first quarter of 2021 to invest in BTC. The company will also invest its own cash in BTC.
GreenPro Capital is the next NASDAQ company after MicroStrategy and Square to invest in Bitcoin and consider cryptocurrency as part of a diversified investment strategy. The aspect is particularly interesting here. that GreenPro Capital not only uses equity, but, similar to MicroStrategy, also uses debt capital to invest in Bitcoin.
This previous bet works well at MicroStrategy: Their investment of $ 1 billion has now grown to $ 2 billion, which has done wonders for the share price, which has risen from $ 100 to $ 425. By investing in Bitcoin, MicroStrategy competes as Bitcoin itself, if you consider the pure performance,
The fact is that this decision will also lead to a medium-term change in corporate policy. More companies will be asking themselves whether they shouldn’t keep their capital stocks in Bitcoin in addition to their euros and dollars.