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Inside Real Vision’s landmark Bitcoin purchase

Photo of: Nathan VDH
by Nathan VDH

The privately held company Real Vision now has capital in Bitcoin. Its manager, Raoul Pal, reports that this investment goes back 3 months and represents 10% of the company’s liquidities.

Investing its cash in Bitcoin rather than in other assets is not yet common practice. Many multinational companies are taking the plunge, such as MicroStrategy or Square. In total, these companies would hold 243,000 Bitcoins, the equivalent of $4.5 billion.

The company Real Vision joins the ranks, but cannot compare to players like Square in terms of size. Nevertheless, and for the last 3 months, 10% of its liquid assets have taken the form of Bitcoin. It is its CEO, Raoul Pal, who announces it.

Boss of a TV on demand service on finance, and especially crypto-actives, this investment is almost self-evident. As he explains to Decrypt, Pal has been interested in cryptocurrencies since 2012.

In order to convert its liquid assets in this way, Real Vision used BlockFi’s crypto loan service. The company also offers its Bitcoin in the form of loans, which gives it an annual return of 6%.

“That’s only 10%. What’s the worst that could happen? Bitcoin drops by 50% and we lose 5% of our cash flow. We are a subscription-based company. We generate cash, so we should be okay. But if the value is multiplied by 10, it makes an honorable difference,” comments the executive.

However, many companies today are not willing to take this risk. For Pal, the treasury manager cannot invest in cryptocurrencies without first reassuring the shareholders.

At MicroStrategy, the decision to invest in Bitcoin was supported by senior management. “This is not speculation or hedging. It is a deliberate corporate strategy to adopt the Bitcoin standard,” said CEO Michael Saylor.

However, Saylor has a strong financial argument to impose his choice on shareholders. Saylor is indeed the first shareholder of the publisher with 23.7% of the shares, but 72% of the voting rights.

The boss is therefore in a position to impose his conviction with regard to Bitcoin. This is not the case for the executives and financial directors of many companies. In order to convince, crypto-actives need the legitimacy provided by actors of traditional finance.

“They need a paper written by an investment bank or someone credible who says that it is a very good diversification asset that adds overall value to your portfolio. As soon as this type of research is published – and there’s already some of it – it’s going to be a complete game-changer,” argues Raoul Pal.

Real Vision does not specify the overall value of its investment in Bitcoin. The company acquired the cryptocurrencies at the start of the bull run for around $12,000. With a Bitcoin above 19,000 dollars, it has now realized a capital gain of 60%.