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Publicly-traded company SynBiotic turns to bitcoin to hedge against Euro devaluation

  • There is a growing trend of companies hedging with BTC.
  • A German cannabis company is turning to bitcoin to hedge against Euro's monetary expansion.
  • Bitcoin’s impressive run continues as the digital asset surpassed $51K.

Another publicly-traded company is turning to bitcoin as a way of hedging against the devaluation of fiat currencies.

SynBiotic SE, a German cannabis firm is making the move into bitcoin because it is concerned about the future health of the euro.

Legitimate concerns

In an update on its website, the company revealed that it “has started to shift some of its free liquidity into bitcoin” as there is an “excessive increase in money supply in both the euro and USD zones.”

The coronavirus pandemic has forced several central banks to turn on their money-printing machines to stimulate the economy.

In December last year, the European Central Bank (ECB) planned to print an additional 500 billion euros, bringing the grand total of newly minted money to  1.85 trillion. In the U.S., the Federal Reserve pumped around $3.34 trillion to stimulate an economy ravaged by the pandemic.

SynBiotic SE claims that it is the first publicly-listed company to use bitcoin to hedge against a Euro crash.

Bitcoin is the antithesis of fiat

SynBiotic SE CEO  Lars Müller said, “bitcoin is the antithesis of traditional currencies.” Bitcoin has a finite supply and only 21 million will be mined. The CEO lauded bitcoin for being decentralized and tamper-proof.

This is in sharp contrast with traditional currencies that can be printed whenever the authorities feel that there are legitimate needs for additional monetary supply.

“For this reason, we have more long-term confidence in bitcoin than in euros or dollars, where a central institution, influenced by politicians, can expand the money supply immeasurably.”

Apart from the devaluation of fiat currencies, the company has turned to bitcoin because the cannabis industry has had very positive experiences with the digital asset as “a simple and digital means of payment.”

A new trend

There is a growing trend of companies hedging with BTC. Microstrategy announced yesterday that it is borrowing $600 million to buy more bitcoins, and it already owns 71,079 BTC.

Microstrategy and Tesla are currently the big players, as they have both purchased bitcoins worth at least $1 billion.

This trend will likely be boosted by bitcoin’s soaring prices, which topped $51K today.

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