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UK-based fintech Mode holds £750,000 worth of bitcoin

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The company allocated 10% of its cash reserves to purchase more bitcoin

UK-based fintech company Mode, which also brands itself as a bitcoin banking app, has revealed that it holds £750,000 worth of bitcoin, media reports said. The company has allocated 10 percent of its cash reserves to purchase more bitcoins.

According to Mode, which is listed on the London Stock Exchange, it is seeking to diversify away from low-interest money market instruments in order to maximise the value of returns from its recent fundraising.

Mode’s decision to buy more bitcoin is based on its long-term strategy to protect investors’ assets from currency debasement.

It is reported that the custody of Mode’s bitcoin is being shared between US cryptocurrency companies BitGo and Coinbase.

Founder and executive chairman Jonathan Rowland told the media, “Faced with the challenges of Covid and with UK interest rates at the lowest level in the Bank of England’s 326-year history, our confidence in the long-term value of bitcoin has only increased. Today’s allocation is executed through a modern, forward-looking but prudent treasury management strategy.

“We made the decision to start buying bitcoin about ten days ago. We wanted to put our money where our mouth is,” he added.

Recently, the UK’s Financial Conduct Authority (FCA) banned the sale of cryptocurrency derivatives products to retail investors. According to the regulator, the step is being taken to save the targeted customers £53 million in losses each year. The ban comes into effect on January 6, 2021.

In a statement, FCA said that derivatives based on digital assets like bitcoin or ethereum are ill-suited for retail consumers due to the threat they possess.

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