Hi there. This is short finance blog about an article I just came across. It is about a condo corporation in Regina, Saskatchewan, Canada investing into a small amount of Bitcoin.
The amount of Bitcoin invested is 0.4 BTC for $25000 CAD. This is not that much compared to something like Microstrategy and Michael Saylor's $425 Million Bet on Bitcoin back in Oct 2, 2020
Here is the full short article found from Toronto based news CityNews
REGINA — A Saskatchewan condo corporation has purchased thousands of dollars worth of bitcoin in hopes of eventually eliminating fees for residents, but experts say such cryptocurrency investments come with risks.
Regina-based Thornton Place Condominium Corporation says it recently bought 0.4 bitcoin for $25,000 through cryptocurrency platform Kraken and has allocated $700 per month for future purchases of the cryptocurrency.
Condo board treasurer Howard Ulmer says the Bitcoin investment idea came from a former board member and was designed to be conservative in order to mitigate risks.
Ulmer says the investment amounts to about 5 per cent of the corporation's reserves and 6 per cent of its monthly operating fund.
However, University of Toronto finance professor Lisa Kramer warns that cryptocurrencies can be volatile and it is easy for investments in Bitcoin to quickly erode in value.
She thinks it was wise for the board to limit its exposure to Bitcoin, but says she hopes other condo corporations don't use the practice because of the risks it involves.
This report by The Canadian Press was first published March 17, 2021.
The Canadian Press
It is not known how much money this condo corporation works with. However, the article does mention that the investment amounts into Bitcoin is about 5% of the corporation reserves. This condo corporation seems to be trying out Bitcoin and seeing how it does. It is good that this corporation does not put too much into it.
The University of Toronto finance professor part kind of annoyed me.
However, University of Toronto finance professor Lisa Kramer warns that cryptocurrencies can be volatile and it is easy for investments in Bitcoin to quickly erode in value.
She thinks it was wise for the board to limit its exposure to Bitcoin, but says she hopes other condo corporations don't use the practice because of the risks it involves.
Volatility is the finance version of the standard deviation from statistics. It refers to the spread or range of possible values an asset or an investment can take on. Something with low volatility will remain mostly stable with not too many large price movements. High volatility assets, stocks, investments have larger price movements as they can take a larger range of values. The opinion from the finance professor appears biased towards Bitcoin losing value because of volatility. I would argue that volatility can lead to big rewards as in big risk can lead to big rewards.
Let's see how this turns out for the condo corporation. There are more and more news stories out there about large companies and institutions adopting Bitcoin. This news story could be of many Bitcoin adoptions from corporations in Canada.
