Mode, a London Stock Exchange-listed company that brands itself as a “bitcoin banking app,” has revealed it now holds around £750,000 ($980,000) worth of bitcoin after announcing plans this week to put 10% of its cash reserves into the cryptocurrency.
“We made the decision to start buying bitcoin about ten days ago,” Mode founder and executive chairman Jonathan Rowland said, speaking over the phone. “We wanted to put our money where our mouth is.”
Custody of Mode’s near-$1 million worth of bitcoin is being shared between U.S. cryptocurrency companies BitGo and Coinbase.
Mode, which now boasts 25,000 users of its iPhone-only bitcoin-buying app, according to Rowland, announced this week it planned to buy bitcoin as part of a long-term strategy to “protect investors’ assets from currency debasement” and said it would convert “up to 10% of its cash reserves into bitcoin.”
Mode’s stock rose around 10% on the news, climbing along with the bitcoin price that soared after payments giant PayPal
Earlier this month, Mode raised £7.5 million when it floated on the London market and is aiming to use the funds to reach 1 million users within three years.
Rowland said he expects Mode stock to move with the price of bitcoin in the future.
“There’s an element of Mode trading on the price of bitcoin,” He said. “Mode shares can give people a proxy to owning bitcoin. It gives people an option to get exposure without buying bitcoin.”
After a difficult couple of years, bitcoin has found fresh support in 2020 due to a return to ultra-low interest rates around the world and as a potential hedge against the inflation some see on the horizon—attracting the attention of some big-name investors.
Bitcoin was thrust into the limelight earlier this month when Square, led by Twitter
“We met with Jack Dorsey and spoke to him about adding bitcoin to treasury assets last year,” said Rowland, who added he believes bitcoin will eventually become “the only real global currency.”