Metromile Reveals Bitcoin Purchase Worth $1 Million In Q2

Metromile digital pay-per-mile vehicle insurance company based in San Francisco revealed in its filing with the U.S. Securities and Exchange Commission (SEC) that it bought Bitcoins worth $1 million as part of its treasury reserve in June 2021.USA - Metromile sign at the Company's headquarters

Twitter handle @MacroScope17 reported the news about Metromile’s Bitcoin purchase. The tweet spurred several people to talk about the purchase, stating how significantly small the Bitcoin purchase was for the digital insurance platform and pay-per-mile auto insurer.

The report showed that Metromile has invested just 0.5% of its cash in Bitcoin, and it would have been better if the amount was at least 5-10%. The second-quarter financial results of the insurance company indicated that Metromile had $202.584 million in cash during that time of purchase.

However, such purchases mean that crypto adoption is increasing, and companies are going a step further and taking the risk to invest in Bitcoin.  

In May, Metromile stated that it would soon buy additional Bitcoins and announced that it would introduce an option in which policyholders pay for insurance and receive payment for eligible and approved insured claims in Bitcoin.

Metromile CEO Dan Preston talked about the development and said:

“We believe in the transformative potential of blockchain technology. We are still in the early days of realising how this shift to decentralised finance and cryptocurrency will create enduring advantages in insurance. Still, we believe that offering bitcoin as an option for premium and claims payments would be an important first step.”

Why Firms Are Big on Bitcoin?

Blockchain and Bitcoin technology have created unique opportunities for different individuals (traders and investors) and sectors (real estate, finance, etc.). With the rise in cryptocurrency awareness and widespread adoption, institutional investors increasingly enter the crypto landscape. Many businesses and companies have already started accepting Bitcoin and other cryptocurrencies as payment mediums for goods and services.

Metromile Nasdaq-listed insurance firm joins a rising list of firms that have bought Bitcoin for their balance sheet. A few months ago, public companies like MicroStrategy, Square, Tesla, and others purchased Bitcoins as part of their treasury reserve. MicroStrategy made headlines by putting more than 90% of its treasury assets into Bitcoin.

What appears like a smart move for them may not translate into a good one for another firm. But for these companies, are not speculating and have been quite targeted in their decision-making. Of course, these public companies have used their treasury capital to make a bet on Bitcoins to add value to their shareholders.

Image source: Shutterstock


Tagged : / / /

Jim Cramer Says Every Company Should Have Bitcoin on Their Balance Sheet

In an interview with CNBC’s “Squawk Box” on February 9, Jim Cramer shared advice on why businesses should purchase Bitcoin as a reserve asset rather than holding onto fiat currency.

The former hedge fund manager and host of “Mad Money” told investors that it would be a bad idea for companies not to get on board with Bitcoin.

Cramer said: “As far as a way to be able to have a pastiche of things to do with your cash, I’m all for it. I think it’s almost irresponsible not to include it. Every treasurer should be going to boards of directors and saying should we put a small portion of our cash in Bitcoin?”

Cramer claimed that Bitcoin could be utilized as a hedge against inflation or an equity portfolio, stating, “It (Bitcoin) seems to be an interesting way to hedge against the rest of the environment, nice hedge against fiat currency.”

With one of the most important companies in the world, Tesla electric vehicle manufacturer, recently announcing its decision to buy Bitcoins, Cramer endorsed the idea of more companies joining the institutional wave of supporters backing Bitcoin with large-scale purchases. 

Cramer admitted that he owns Bitcoin and believes that the cryptocurrency is a potential hedge against fiat currency.

Bitcoin as A Primary Treasury Reserve Asset

On February 8, Tesla Inc. made a purchase of Bitcoin worth $1.5 billion, a crucial announcement that led to the rise of the leading cryptocurrency by almost 20% in its price, thus setting a new all-time high above $47,000. MicroStrategy set the pace for institutional investors by becoming the first publicly traded firm to purchase Bitcoin as part of its capital allocation strategy, beginning with an initial purchase of $250 million in August 2020. The company revealed its plan to purchase Bitcoin as a way to protect against inflation. Since then, several major companies such as Square Inc. and Mass Mutual have converted part of their balance sheet to Bitcoin as a long-term capital allocation strategy that focuses on maximizing the value of their shareholders in the long run.  

Image source: Shutterstock


Tagged : / / /
Bitcoin (BTC) $ 26,815.18 0.96%
Ethereum (ETH) $ 1,866.84 0.05%
Litecoin (LTC) $ 94.77 5.67%
Bitcoin Cash (BCH) $ 113.12 0.43%