Bitcoin, Cryptocurrency, News & Updates

Software Firm Snappa Swaps 40% Cash Reserves for Bitcoin

August 25, 2020

Last Monday, Snappa, a Canadian graphics software company, publicized that it held bitcoin as a reserve asset. Snappa follows the firm Microstrategy and the Canadian restaurant chain Tahini by deciding to convert cash reserves into the scarce crypto asset.

Snappa, the graphics software firm based in Ottawa, has joined the trend of companies converting cash reserves into bitcoin (BTC). The company exposed its decision last Monday, August 24, when Christopher Gimmer, the co-founder, wrote a blog post about the move.

In addition to this, Gimmer also spoke with the journalist, Zack Voell, in a private chat, and he detailed that Snappa has allocated “40% of our cash reserves’ into the crypto asset. Gimmer explains why the frim made this decision in the blog post titled “Why We’re Holding Bitcoin as a Reserve Asset.”

“Would you rather save money in a currency whose supply is inflating each year? Or would you rather save in a currency whose terminal supply is programmatically fixed?” Gimmer asked during the announcement’s opening statements.

The company apprehended that this was a critical deliberation when the firm’s bank “slashed the interest rate on our ‘high interest’ savings account to 0.45% earlier this year.”

Gimmer further stated:

“This means that the purchasing power of our Canadian and U.S. Dollars is actually decreasing after adjusting for inflation. Fortunately, I believe we now have a far superior savings technology available to us. That technology is Bitcoin.”

Snappa’s cofounder underlines several reasons why the firm decided to allot bitcoin into its reserves. The reasoning was due to global economic uncertainty, the devaluation of fiat, and Bitcoin’s digital scarcity.

He also mentioned the controversial stock to-flow (S2F) theory in the announcement and believes that because of Bitcoin that is transparent, “we can actually measure Bitcoin’s S2F with 100% certainty at any point in the past and at any point in the future.”

Gimmer also stated that “many people” believe that quantitative easing (QE) and the government’s handling of debt will lead to “asset price inflation and a widening health gap.” The co-founder of Snappa considers that this trend of money creation and the diminishing of fiat currencies will continue.

The co-founder of Snappa’s blog post also debated the billion-dollar firm Microstrategy’s purchase of 21,454 BTC for $250 million. Microstrategy also stated that when it shifted reserves that holding (BTC) was far superior to holding dollars.

“After pouring over the research myself, I believe that massive amounts of quantitative easing combined with fiscal stimulus will continue to result in currency debasement,” Gimmer finished. “In addition, I expect governments to keep doing more of the same in attempts to fight the natural deflationary pressures of technology.”

The Snappa co-founder added:

 “In order to hedge this risk, we’ve chosen to adopt bitcoin as a primary reserve asset on our balance sheet.”

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