Abra Launches Abra Treasury, Enabling Corporates to Hold Crypto as Reserve Assets

2024-07-01 04:01:17

Ruholamin Haqshanas

Last updated:

July 1, 2024, 08:01 EDT | 2 min read

Digital asset prime services and wealth management platform Abra has announced the launch of Abra Treasury, a service designed for corporates seeking to hold cryptocurrencies as reserve assets on their balance sheets.

The service will provide a comprehensive range of digital asset treasury management solutions to corporates, family offices, and non-profits, the firm reportedly said in a Monday press release.

Abra Treasury, operated by Abra Capital Management, an SEC-registered investment advisor, combines custody, trading, borrowing, and yield services.

It allows clients to securely hold their cryptocurrencies in separately managed accounts, enabling them to retain ownership and control over their digital assets.

Corporate Treasurers Explore Bitcoin

The ongoing macroeconomic uncertainties, characterized by increasing inflationary pressures and geopolitical tensions, have ed corporate treasurers to explore the inclusion of Bitcoin (BTC) as a reserve asset.

Notably, MicroStrategy (MSTR), a Nasdaq-listed software firm led by Michael Saylor, holds the largest corporate Bitcoin reserve, with an impressive stash of 226,331 tokens accumulated since 2020.

Marissa Kim, the Head of Asset Management at Abra Capital Management, highlighted the growing trend of non-crypto-native businesses expressing interest in utilizing Bitcoin as a treasury reserve asset.

She noted that Abra is witnessing a surge in business owners and CEOs of small to medium-sized enterprises, particularly in real estate companies, considering BTC purchases for their treasuries or utilizing BTC as collateral for business needs and real estate projects.

“We are increasingly seeing clients that are business owners and CEOs of small to medium-sized businesses (SMBs), in particular real estate companies, with interest in buying BTC for their treasury or borrowing against BTC to finance business needs or real estate projects, which we did not see last cycle.”

It is worth mentioning that the company and its founder and CEO, William “Bill” Barhydt, recently settled with 25 state financial regulators.

The settlement agreement, announced by the Conference of State Bank Supervisors (CSBS), requires Abra to reimburse up to $82.1 million in cryptocurrency to customers in the settling states.

Metaplanet Copies MicroStrategy’s Bitcoin Strategy

MicroStrategy’s successful Bitcoin strategy has also led to other public companies considering adding Bitcoin to their balance sheet.

Back in April, Metaplanet revealed its decision to incorporate Bitcoin into its treasury assets due to several factors.

Firstly, it aims to minimize its exposure to the Japanese yen, which has been significantly impacted by Japan’s low-interest-rate environment.

In a shareholder update, Metaplanet expressed concern about the yen’s vulnerability and highlighted Bitcoin’s potential as a hedge against inflation, a tool for macroeconomic resilience, and a source of long-term capital appreciation.

Meanwhile, a number of major corporate investors in Bitcoin, including Microstrategy, have already seen their profits skyrocket.

As per data aggregated by Saylortracker, at current market prices of around $67,000, MicroStrategy’s position now commands a total valuation exceeding $14.59 billion.

This means the company sits on tremendous unrealized profits of almost $6.5 billion on paper – reflecting a gain of almost 104% yield-to-date from an investment allocation started under Saylor back in 2020.

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