Cloud Service Provider Rumble to Invest $20M in Bitcoin
Rumble Announces $20M Bitcoin Purchase to Build Reserve, Shares Surge 4% in After-Hours Trading.
Key Takeaways:
- Rumble has unveiled plans to allocate part of its excess cash toward building a bitcoin reserve.
- The company will make an initial purchase of $20 million worth of Bitcoin as part of this strategic move.
- Following the announcement, Rumble's shares saw a notable rise, gaining nearly 4% in extended trading.
Video sharing and cloud service provider Rumble plans to diversify its financial strategy by allocating part of its excess cash to building a Bitcoin reserve, starting with an investment of up to $20 million. The company stated that the timing of the initial purchase will be decided at management’s discretion.
Through this cryptocurrency initiative, Rumble is following the path of companies like MicroStrategy, which gained prominence for its aggressive Bitcoin acquisition strategy initiated in 2020.
Rumble’s Bitcoin Reserve Will Strengthen Ties to the Crypto Community
In the press release, Rumble’s CEO, Chris Pavlovski, shared the reasoning behind the Bitcoin reserve, emphasizing that the world is still in the early stages of Bitcoin adoption.
Pavlovski cited factors like the election of a crypto-friendly president and increased institutional interest as signs of the cryptocurrency’s accelerating momentum.
He also highlighted Bitcoin’s distinction from fiat currencies, which can suffer from inflation due to excessive money printing, positioning it as a valuable addition to Rumble’s treasury.
The company’s strategy extends beyond financial growth. The CEO expressed excitement about how this Bitcoin reserve could strengthen Rumble’s ties with the crypto community and solidify its position as the leading video and cloud services platform for crypto enthusiasts and users.
However, the exact timing and value of Bitcoin purchases remain uncertain. Rumble said management would decide when and how much to invest, factoring in market conditions, Bitcoin’s trading price, and the company’s overall cash needs.
This announcement follows Pavlovski’s earlier tease on X, where he conducted a poll asking users if Rumble should add Bitcoin to its balance sheet. The response was overwhelmingly positive, with nearly 94% of over 43,000 voters supporting the idea.
The CEO’s hint has quickly turned into concrete action, signaling Rumble’s commitment to embracing cryptocurrency.
The stock market has also reacted positively to the news. During the trading session following the announcement, Rumble’s stock (RUM) surged by 12.63%, reaching $7.31. After-hours trading saw an additional 5.47% increase, underlining investor optimism about the company’s new direction.
Will the Company's Move Mirror the Success of MicroStrategy and Metaplanet?
Rumble’s plan for a Bitcoin reserve could mirror the success of companies like MicroStrategy and Metaplanet.
As of November 25, MicroStrategy holds 386,700 Bitcoin, making it one of the largest corporate holders of the cryptocurrency, with its shares up more than 500% in 2024, acting as a direct proxy for Bitcoin.
Similarly, Japanese investment firm Metaplanet has increased its Bitcoin holdings significantly, reaching 1,018.17 BTC. This surge follows a $28 million profit from Bitcoin investments, surpassing the firm's market capitalization at the beginning of the year.
Beyond these examples, other companies are increasingly recognizing Bitcoin's value as a treasury asset.
Acurx Pharmaceuticals has recently approved a purchase of up to $1 million in Bitcoin as part of its treasury reserve strategy.
This trend is a major indicator of Bitcoin’s growing acceptance as a hedge against inflation and a store of value. Bitcoin’s price has surged to all-time highs, and with the anticipation of more crypto-friendly policies under the incoming administration, many believe Bitcoin’s value could double by 2025.
Jimmy Aki
Drawing from his background in economics, Jimmy has monitored blockchain development for years, firmly believing in its power to democratise finance. Beyond offering commentary on the latest crypto developments, he also spends his time analysing open-source codes of promising projects on GitHub. Jimmy holds Bitcoin and Ethereum.
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