Matador Allocates $4.5 Million to Bitcoin for Corporate Treasury
Matador, a company utilizing blockchain technology for digital asset representation, has announced that its Board of Directors unanimously approved the inclusion of Bitcoin and USD-denominated assets in its corporate treasury. This decision aims to protect and manage financial resources over the long term.
This move follows concerns about holding most of its treasury in Canadian dollars, specifically risks linked to Canada’s reliance on oil exports and increasing national debt, which could lead to currency devaluation. Matador plans to allocate $4.5 million to Bitcoin by December 2024, with potential future increases.
Matador Shifts to Bitcoin to Hedge Against Currency Risk
Matador intends to transition much of its cash balance from CAD to USD, viewing Bitcoin as a store of value against currency devaluation. This strategy aligns with trends among leading institutions adopting Bitcoin to safeguard against depreciating fiat currencies.
Matador President Sunny Ray indicated that the board and management see Bitcoin as a means to secure their treasury and support the integration of Bitcoin into their gold-based products. He stated:
“Matador’s Board and management believe in using Bitcoin to future-proof our treasury […] This step also supports our mission to explore using Bitcoin as a platform for our gold-based products.”
Bitcoin’s Role in Securing Matador’s Financial Future and Product Development
The inclusion of Bitcoin will expedite the development and launch of Matador's gold platform, allowing users to own, trade, and store digital gold backed by physical reserves at the Royal Canadian Mint. These reserves are expected to enhance product development and investor confidence in the company’s treasury strategy.
Matador selected Bitcoin over other digital assets after evaluating platforms like Ethereum and Solana. The deep liquidity of Bitcoin and its increasing institutional adoption made it a preferable option for Matador’s digital gold platform.
CEO Deven Soni emphasized that Bitcoin is the optimal choice for their product, which prioritizes trust, permanence, and value. The Board plans to review additional technology options and decide by the first quarter of 2025 which platform will support its digital gold product. Following this, Matador intends to launch the product to a limited audience while keeping shareholders updated on treasury and custody plans.