Publicly-listed tech firm Nexon purchases $100 million in Bitcoin as a store of value
- South Korean-Japanese video game company Nexon has allocated some of its cash holdings to the leading cryptocurrency.
- The firm purchased $100 million in Bitcoin for an average price of $58,226 per BTC.
- The gaming company's allocation to the pioneer digital currency is less than 2% of its total cash.
Online game provider Nexon Co. acquired $100 million in Bitcoin. This became the largest-ever purchase of digital currency made by a listed company in Tokyo.
Bitcoin likely to retain its value despite associated risks
A growing number of firms worldwide, including MicroStrategy, Tesla and Square, have purchased Bitcoin in the past few months. More firms are starting to adopt the cryptocurrency as a form of payment and store of value.
Nexon, a South Korean-Japanese video gaming company, bought 1,717 Bitcoin at a total cost of $100 million. The average price of each Bitcoin purchased was $58,226, including fees and expenses.
The price of Bitcoin acquired by the video game publisher was higher than the current BTC price, which is trading at $55,508 at the time of writing.
Owen Mahoney, CEO of Nexon, cited the current economic environment as one of the main drivers of investing in the new asset class. Mahoney said:
Our purchase of Bitcoin reflects a disciplined strategy for protecting shareholder value and for maintaining the purchasing power of our cash assets. In the current economic environment, we believe Bitcoin offers long-term stability and liquidity while maintaining the value of our cash for future investments.
The tech firm’s purchase of the leading cryptocurrency represents less than 2% of Nexon’s total cash and cash equivalents. Mahoney stated that he understands that there are risks associated with the digital asset. However, the company is committed to studying them in the future.
In a blog post, Mahoney said he expects a strong chance that a virtual store of value that is not controlled by a central authority could become mainstream in the near future. The CEO sees Bitcoin as a form of cash “likely to retain its value,” even if it is not yet widely recognized as such. He further questioned whether legacy currency systems could be relied on in the future.
Mahoney highlighted that paying down the debt would be more difficult with government spending and debt levels high than it already is, especially with just a small rise in interest rates. Since early 2020, America has printed more than 40% more US dollars than previously existed, and Nexon foresees no end to this loose monetary policy in the near term.
Author
Sarah Tran
Independent Analyst
Sarah has closely followed the growth of blockchain technology and its adoption since 2016.
