Digital Assets: Canadian Software Company Snappa Converts 40% Cash to Bitcoin

August 25, 2020 | Digital Assets, News

Snappa co-founder Gimmer says the company started accumulating bitcoin since March this year.

Canadian graphics software company Snappa started converting cash reserves into bitcoin since March this year after realizing that the purchasing power of Canadian and U.S. dollars is actually decreasing after adjusting for inflation. Writing in a blog, Snappa co-founder Christopher Gimmer said bitcoin “now makes up a significant percentage of our company’s overall cash reserves.” (

In a separate chat with Coin Desk’s Zack Voell, Gimmer revealed that the investment represented 40% of the company’s cash reserves.

Snappa’s Gimmer: Fiat money destroys wealth

Drawing on historical examples of West Africa, India and China, Gimmer observes that “if the supply of your money can be inflated away, your purchasing power will plummet as a result.”

On the other hand, gold retained its value and purchasing power over the ages due to its scarcity and low annual supply.

“While an ounce of gold was valued at $20 USD in 1920, that same ounce of gold is now worth close to $2,000 USD,” says Gimmer. “Said differently, the U.S. dollar has lost 99% of its purchasing power relative to gold over the course of the last century.”

Bitcoin has a fixed supply: 21 million, and is better than gold

Gimmer observes that not only does bitcoin have a fixed supply, its supply will get scarcer and scarcer over time (unlike fiat money).

Evaluating gold and bitcoin under the concept of “stock-to-flow,” Gimmer observes that both assets are more or less equally scarce currently.

“However, after the next halving, Bitcoin will be twice as scarce as gold,” predicts Gimmer.

Referring to the famous cross asset price model devised by a pseudonymous quant trader PlanB, Gimmer says: “I personally believe that a Bitcoin price of $100k by the end of 2021 is fairly realistic given its fundamentals and the current state of the macro economy.”

(Incidentally, PlanB’s model estimates that the price of Bitcoin could reach $288k in this current 4 year cycle.)

Gimmer makes the point that bitcoin will substantially outperform gold “over the coming years and decades.”

Macroeconomic situation

“We’ve now reached an end game where rates can’t go any lower unless we go negative like some countries have,” says Gimmer. “Since interest rates are no longer an effective policy tool for stimulating the economy, the Federal Reserve and other central banks have been ramping up quantitative easing (QE) whereby they “print” money to buy up financial securities from banks and inject liquidity into the system.”

This phenomeon is leading to asset price inflation and rising wealth inequality.

“Massive amounts of quantitative easing combined with fiscal stimulus will continue to result in currency debasement. In addition, I expect governments to keep doing more of the same in attempts to fight the natural deflationary pressures of technology.”

“In order to hedge this risk, we’ve chosen to adopt Bitcoin as a primary reserve asset on our balance sheet,” concludes Gimmer.

Related Story:    Nasdaq-listed Company Microstrategy Bets $250M on Bitcoin

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