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Latin America E-Commerce Giant MercadoLibre Purchases $7.8 Million Worth of Bitcoin

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Mercadolibre, a Latin American e-commerce giant, revealed that it added cryptocurrency to its balance sheet, scooping up $7.8 million worth of Bitcoin. Besides that, the stock listed company announced that it has also accepted Bitcoin as a payment method.

Consumers now can pay in Bitcoin for purchases of goods and services bought via the American e-commerce site.

The Argentina-based firm stated in an earnings report that the Bitcoin purchase occurred in the last quarter ending in March and was part of the company’s treasury strategy.

The online retailer, partnered with BitPay Georgia-based payment service provider, plans to enable cryptocurrency services on its platform.

Apart from that, Mercadolibre launched a new Bitcoin-only real estate platform last week.

The online retailer integrated Bitcoin into its MercadoPago payments platform in 2015. Currently, Brazilian consumers use the MercadoPago platform to pay for Uber, metro rides and utility bills.

With its Bitcoin investment and integrating the crypto into its platform, the firm’s involvement in the digital asset sector appears fruitful.

Mercadolibre – the largest e-commerce retailer in Latin America – is listed on the Nasdaq stock market and trades under the ticker symbol MELI. The company has a market capitalization of over $76 billion.

The online retailer’s decision to invest in Bitcoin and accept it as a payment method legitimatizes the cryptocurrency. More than 3000 brands or stores are known to conduct their business trades within Mercadolibre’s ecosystem in the region with the retailer widely popular in nations including Brazil, Mexico, and Argentina.

Bitcoin Better Than Holding Cash

Mercadolibre becomes the latest publicly-traded company to add Bitcoin to its balance sheet. Although the Bitcoin purchase is small compared to Tesla ($1.5 billion) or MicroStrategy ($2.2 billion), Mercadolibre’s investment indicates a strong step towards mainstreaming cryptocurrencies as a reliable investment and payment method.

An increasing number of publicly traded companies, including Square payment company, Tesla motor vehicle manufacturing firm, MicroStrategy software company, MassMutual insurance company, and others have added Bitcoin as part of their capital allocation strategy to maximize long-term value of investments for their shareholders. Such investments show that Bitcoin is a reliable store of value and an attractive hedge asset with more long-term appreciation potential than cash.

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MicroStrategy Plans to Raise $400M Of Debt to Add More Bitcoins on Its Balance Sheet

MicroStrategy Inc. announced that the company plans to offer $400 million of senior secured notes to qualified institutional buyers to raise more capital to make more Bitcoin purchases.

According to the company’s filing, MicroStrategy will raise $400 million via senior secured notes due 2028 in a private offering to qualified institutional buyers. The Nasdaq-listed business intelligence company plans to use the net proceeds from the sales of the notes to add more Bitcoins to its balance sheet.

The announcement comes after the company revealed that it was compelled to take an impairment loss of about $285 million in the second quarter because of Bitcoin price fluctuation.

Currently, the company holds 92,079 Bitcoins purchased with a total of $2.251 billion at an average price of about $24,450 per Bitcoin. The firm’s Bitcoin holdings are currently worth about $3.3 billion.

Michael Saylor, MicroStrategy CEO and prominent Bitcoin advocate attended the Bitcoin 2021 conference event in Miami over the weekend and talked about how he entered into the Bitcoin space. He said he believes in digital currency and how including Bitcoin on the firm’s treasury reserve has helped the company achieve its best financial performance in a decade.

“We say Bitcoin is hope. Bitcoin fixes everything…that certainly was the case with our stock. It imbued life into the company…morale was dramatically boosted. We just had the best first quarter we’ve had in a decade,” Saylor said.

Saylor further stated that the Bitcoin purchases have helped the company market its software products and services and build awareness, and he plans to continue buying more Bitcoins.

Bitcoin as A Primary Treasury Reserve Asset

This is not the first time MicroStrategy borrowed millions of dollars through senior secured notes to buy more Bitcoin as part of its balance sheet.

In February, the business intelligence firm completed a debt sell-off of $1.05 billion worth of senior convertible notes to qualified institutional buyers and, therefore, purchased an additional $1 billion in Bitcoins.

In December 2020, MicroStrategy sold $400 million in senior convertible notes and then bought $10 million worth of Bitcoin.

The company first began investing in the leading cryptocurrency in August 2020, when it made a massive $250 million investment in Bitcoins as part of its capital allocation strategy. During that time, MicroStrategy stated that its decision to invest in Bitcoins was influenced by factors affecting the business and economic landscape, which the company believes are causing long-term risks for its corporate treasury program. The company kept on adding more Bitcoins to its balance sheet to diversify and maximise returns on its cash holdings and hedge against inflation.

South Korea’s Teachers’ Pension Fund Announces Plans to Invest in Bitcoin on Its Balance Sheet

According to the announcement revealed by the Korea Economic Daily, the Korea Teacher’s Credit Union (KTCU), the second-largest institutional investor in South Korea, is planning to invest in Bitcoin as part of its balance sheet.

The public pension fund would not purchase Bitcoin directly but get exposure to it via investment products like Bitcoin ETFs.

The KTCU is seeking to invest in a Bitcoin Exchange Traded-Fund when the first Korea-based firm launches a Bitcoin ETF in the first half of 2022. Of course, the Mirae Asset Global investment is preparing to launch BetaPro Inverse Bitcoin ETF at any time next year.

The Korea Teacher’s Credit Union is set to become the first pension fund in South Korea to invest in Bitcoin. However, the amount of funds to be invested and the exact time of launch still remains unclear.

A KTCU official talked about the development and stated that the institution plans to consult with local asset management firms before reaching a decision concerning asset allocation.

“As there are some well-made cryptocurrency-linked ETF products by asset managers such as Korea’s Mirae Asset Global Investments, we plan to invest in the ETF products after consultation with domestic asset managers,” the KTCU spokesperson said.

The KTCU is the first pension fund with $40.2 billion in assets under management in South Korea.

At the current moment, the pension fund has allocated 40% of its investments in alternative assets, 9% in international stocks and 10% in domestic. The KTCU will also use the overseas stock accounts for investing in the bitcoin-related ETF assets, the Korea Economic Daily stated.

Crypto Has A Place in Pension Scheme Portfolio

The decision by The Korea Teacher’s Credit Union comes at a time when crypto’s widespread adoption across the world is significantly rising, particularly among pension funds.

Bitcoin has experienced massive growth in the last year, significantly outpacing the S&P 500. Several experts state that the reason for such growth is contributed by lower stock market returns in the near term, fears of inflation, and investors looking for higher yields from alternative investments.

Bitcoin is increasingly becoming a larger part of several institutional portfolios, including pension funds.

Recently as reported by Blockchain.News in February, the California Public Employee Retirement System (CalPERS), the U.S.’s largest public pension system, revealed that it increased its investment in RIOT Blockchain Inc, a publicly-traded bitcoin mining company, from $49,000 in 2017 to $1.6 million in 2020.

Pension funds such as CalPERS normally have been searching for higher investment yields by investing in private equity. However, in recent years, returns from private equity have underperformed in comparison to the S&P.

As a result, institutional investors have been showing increasing interest in even riskier assets that may produce higher yields. This search has led public pension institutions such as Virginia’s Fairfax County employee and Police Officer’s Retirement Systems and the University of Michigan’s Pension to announce plans to invest in Bitcoin and other crypto-assets.

Last week, Houston’s Firefighters Relief and Retirement Fund in the U.S. invested an undisclosed amount of its funds in Bitcoin through institutional Bitcoin services provider NYDIG.

A few days ago, the crypto space got its long-awaited ETF products, and two U.S. Bitcoin backed ETFs have already launched, thus bringing further acceptance of cryptocurrencies.

With the success of the ProShares Bitcoin Strategy EFT, which garnered more than $1 billion in assets in just two days, chances are higher for the queue of other firms hoping to enter into the sector.

The Valkyrie Bitcoin Strategy ETF started trading on the Nasdaq stock exchange on Friday last week, with 3.1 million shares changed hands during that day alone.

All these demonstrate great interest among investors looking to invest in Bitcoin and other cryptocurrencies.

Time Magazine to Add Ether to Its Balance Sheet as Part of Efforts to Support Metaverse Newsletter with Galaxy Digital

Time Magazine will hold Ether (ETH) on its balance sheet for the first time as part of a deal with crypto investment firm Galaxy Digital to educate its readers about the metaverse.

The 98-year old publication announced on Thursday, November 18, that it has partnered with the crypto company as part of efforts to explore the metaverse, to educate and engage as many people as possible about the emerging technology.

Mike Novogratz, CEO and Founder of Galaxy Digital, talked about the development and said: “Over the next decade, the metaverse will become an increasingly important part of the world economy; our physical and digital realities are already becoming hard to distinguish. We look forward to partnering with Time, an iconic brand driving innovation, as we seek to bring readers, creators, and the curious into the metaverse and demystify the tremendous amount of transformation happening within.”

The popular magazine-based in New York will be releasing a weekly newsletter focused on metaverse, compiling a Time 100 companies list for metaverse-related firms and feature educational resources on a new section of its publication, and including the virtual space as a category in its annual list of the 100 most influential people in the world.

Galaxy Digital will offer its expertise to help explain the metaverse and its potential, like taking advantage of insights from Galaxy Interactive General Partners Richard Kim and Sam Englebardt.

The list will highlight firms with the most impact within the metaverse space, some of which may include blockchain firms, while others could be offering solutions to make experiences within the metaverse more successful, impactful or accessible for businesses and consumers.

Time magazine stated that the deal is the first of this nature among media companies. Although financial terms were not disclosed, Time’ company representatives revealed that the deal would run for about six months.

Apart from that, Time magazine mentioned that the partnership with Galaxy digital was conducted using Ether (ETH), which the media company plans to hold on its balance sheet. Since April, the publication has been holding Bitcoin as part of its partnership with crypto investment firm Grayscale.

The Rise of Metaverse

The metaverse is being touted as a better version of the internet, featuring a virtual world for immersive experiences where people across the globe can meet, watch, play, and trade.

As reported by Blockchain.News in late October, interest in metaverse soared after Facebook announced a change of its name to “Meta Platforms Inc.” The social media giant retired its former name “Facebook” because it believes that it only represents a single product. “Meta”, the prefix of the word “Metaverse”, involves the concept of shared virtual worlds and communities, which is the branding Facebook hopes to capture.

Microsoft Inc is also dabbling in the metaverse. It recently introduced Mesh for Team, a virtual workplace.

As a result, other major firms are also shifting their focus in the internet’s next iteration.

Galaxy Digital appears to be focusing on expanding into the metaverse. In October, the firm raised a $325 million fundraising round aimed at virtual endeavours.

PayStand Adds Cryptocurrency to Its Balance Sheet

Last Friday, December 10, PayStand, a cloud-based payment platform for B2B companies, announced that it has been buying Bitcoin and Ether on its balance sheet.

Such action by the PayStand firm marks a significant milestone for B2B SaaS companies and further legitimizes the emergence of crypto as a potential balance sheet asset.

The company’s move to accumulate and hold cryptocurrency underscores its belief in the long-term value of digital assets and that owning DeFi assets will soon become essential for businesses in 2020 and beyond.

Jeremy Almond, PayStand’s CEO, talked about such development and said: “The best technology a company can bet on in the 2020s is the Blockchain, and as such, crypto has become an emerging opportunity to strengthen the corporate balance sheet and help manage capital reservation from external volatility in the fiat money supply.”

Since 2013, PayStand has developed one of the largest blockchain enterprises and pioneered blockchain-based B2B payments. The company uses blockchain technology to verify each transaction made on its zero-fee bank-to-bank network. This is the company’s proprietary payment infrastructure that helps to eliminate punitive transaction fees and unnecessarily long-time cash cycles. Over the past years, PayStand has experienced significant growth due to its technology that offers critical benefits. Currently, only a few private and public companies have managed to add cryptocurrency to their balance sheets. But PayStand believes that the emergence of digital currency as a liquid asset and long-term store of value, alongside the rise of blockchain use at the corporate level, changes the narrative.

Bitcoin in Companies’ Portfolios

The governmental response to the of 2020, which saw the US Federal Reserve expand its balance sheet by more than 75% ($3.25 trillion) and the European Central Bank added more than €2 trillion, is unprecedented. As reported by Blockchain.News, such a massive expansion in financial assets has left many people questioning the long-term value of fiat currency and looking for alternative assets like commodities and cryptocurrencies as hedges against inflation.

Wealthy individuals have begun using cryptocurrencies to supplement alternative investments, and several corporations such as MicroStrategy and others have chosen to hold Bitcoin on their balance sheets. MicroStrategy’s share price quadrupled since adopting Bitcoin as a primary holding in its treasuries. Therefore, the company’s enthusiasm for cryptocurrency and significant appreciation of its Bitcoin assets has continued to rise.

MicroStrategy CEO Michael Saylor stated that such investment reflects the company’s belief that Bitcoin is a dependable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.

Bitcoin is emerging as a significant addition to the global financial system, with valuable characteristics to institutions and individuals. Besides MicroStrategy, several firms have recognized Bitcoin as a legitimate investment asset that can be superior to cash and, as a result, have made crypto the principal holding in their treasury reserve strategy.

In February, Block Inc (formerly Square payments firm) announced that it had bought $220 million worth of Bitcoin in 2020, representing about 5% of its total cash at the end of the year. Earlier this year, Tesla made an even bigger splash by investing $1.5 billion of its cash in Bitcoin. Elon Musk stated called Bitcoin “simply a less dumb form of liquidity than cash” and noted that “when fiat currency has a negative real interest, only a fool won’t look elsewhere.”

Image source: Paystand.com

Valkyrie to Liquidate Bitcoin Balance Sheet ETF following Low Customer Demand

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Valkyrie Funds LLC, a digital asset ETF issuer in the US, announced Tuesday that it will liquidate one of its exchange-traded funds (ETFs) that invests in innovative public companies with exposure to Bitcoin.

The digital assets manager said it would shut down the Valkyrie Balance Sheet Opportunities FUND (Nasdaq: VBB) at the end of this month and then be delisted from Nasdaq, where it has traded since December 2021.

Any investor who holds shares of the fund at liquidation will get a cash redemption equal to the net asset value (NAV) of their claims, according to a filing with the Securities and Exchange Commission on Tuesday.

Valkyrie termed the fund’s dissolution as the best course of action, stating that the move was part of an ongoing review of products to ensure the company best meets customer demands.

The firm said the action was taken after thoroughly consulting the company’s Board of Directors. They determined that discontinuing the fund was the best course of action for all those involved.

Customers never showed much interest in Valkyrie’s second ETF, where the largest positions are MicroStrategy (MSTR) and Tesla (TSLA), firms known for holding Bitcoin on their balance sheets. According to the report, net assets under the fund’s management are only about $570,000 as of now.

Investors may trade shares up until the end of the trading day on October 28. Valkyrie said it would satisfy expenses related to the liquidation, the distribution of cash proceeds, and brokerage expenses.

Last December, Valkyrie Balance Sheet Opportunities ETF aimed to invest primarily in companies that invest in, transact in, or have exposure to the Bitcoin asset class on their balance sheets or those that operate within the Bitcoin ecosystem. The fund is the second in a family of Valkyrie’s ETFs designed to enable investors to participate in the digital asset landscape.

The fund’s discontinuation happens when many investors are still interested in Bitcoin investments despite the market downturn. According to a recent survey, more than 80% of financial advisers in the US are being asked about cryptocurrencies, but many struggles to allocate clients effectively to this asset class. With many publicly traded companies in the US already holding Bitcoin and more corporations, entities, and countries increasingly entering the space, investing in these companies provides indirect exposure that many individuals are seeking.