Investment of $50 Million Bolsters Mogo's Belief in Cryptocurrency through Bitcoin Reserve
Mogo, a Canadian fintech company, has announced a significant shift in its strategic approach, committing to allocate up to $50 million to Bitcoin as part of its treasury and capital preservation strategy [1][2][4]. This move marks Mogo's evolution from an early crypto adopter to integrating Bitcoin as a core part of its treasury and operational framework.
The company plans to build a meaningful Bitcoin reserve that aligns with its capital priorities and market outlook, reflecting a deep conviction in Bitcoin’s role in its future business model. Mogo intends to acquire Bitcoin in phases, funded through available cash and asset liquidations, including proceeds from selling its stake in WonderFi, which is being acquired by US trading giant Robinhood [1][3].
In addition to growing its Bitcoin reserve, Mogo is embedding Bitcoin deeper into its platform. Bitcoin will now serve as a performance benchmark for all capital deployment decisions, requiring new investments to outperform Bitcoin’s expected long-term returns [1][2]. The company is also developing new products involving Bitcoin, such as BTC-collateralized loans and a portfolio model blending equities and cryptocurrency [1]. Furthermore, Mogo is exploring stablecoin infrastructure to enhance cross-border payments.
Greg Feller, cofounder of Mogo, stated that they are making a long-term strategic commitment to Bitcoin. He believes that Mogo's dual-compounding model (operating growth plus a dedicated Bitcoin reserve) is something few companies can achieve. This approach, Feller posits, sets a new standard for capital discipline at Mogo [1][4].
Mogo trades publicly on the Toronto Stock Exchange and NASDAQ under the ticker symbol MOGO. Following the anticipated close of the WonderFi-Robinhood transaction later this year, Mogo expects to hold approximately $50 million in cash and investments. The company will use surplus funds and returns from investments in other companies, such as U.S. crypto exchange Gemini and Canadian software firm Hootsuite, to incrementally increase its Bitcoin holdings while maintaining sufficient capital for core lending and financial services [3].
By 2020, Mogo had become one of the first North American firms to add Bitcoin to its balance sheet, launching Canada's first Bitcoin account in 2018 [5]. The company continues to push Bitcoin adoption on its users, offering educational content but not promoting it as a default solution.
This strategic commitment to Bitcoin is backed by Mogo's deep conviction and the flexibility to build a meaningful Bitcoin reserve that aligns with its capital priorities and market outlook. Mogo aims to grow this reserve alongside its business, with a goal to reach over a billion dollars in enterprise value [2]. By leveraging Bitcoin’s growing prominence as both an asset and strategic benchmark, Mogo is positioning itself for long-term capital discipline modeled on Buffett-style investing.
References: [1] Mogo Newsroom. (2021, March 29). Mogo Announces $50 Million Strategic Bitcoin Reserve. Retrieved from https://www.mogo.ca/newsroom/mogo-announces-50-million-strategic-bitcoin-reserve
[2] Finder. (2021, March 29). Mogo to invest up to $50 million in Bitcoin. Retrieved from https://www.finder.com/ca/mogo-to-invest-up-to-50-million-in-bitcoin
[3] Coindesk. (2021, March 29). Mogo to Diversify Bitcoin Holdings With Gemini, Hootsuite Proceeds. Retrieved from https://www.coindesk.com/mogo-to-diversify-bitcoin-holdings-with-gemini-hootsuite-proceeds
[4] Cointelegraph. (2021, March 29). Mogo to invest up to $50 million in Bitcoin as strategic reserve. Retrieved from https://cointelegraph.com/news/mogo-to-invest-up-to-50-million-in-bitcoin-as-strategic-reserve
[5] CoinDesk. (2018, September 10). Mogo Launches Canada's First Bitcoin Account. Retrieved from https://www.coindesk.com/mogo-launches-canadas-first-bitcoin-account
- Mogo, with its strategic allocation of up to $50 million to Bitcoin, is demonstrating a commitment to integrating digital assets like Bitcoin into its broader finance and investing practices, signifying a shift towards technology-driven business solutions.
- In line with its capital discipline strategy, Mogo is embarking on a long-term endeavor to grow its Bitcoin reserve, aiming to outperform traditional investment returns and develop innovative products, highlighting the company's focus on both business growth and technological advancements.
