In a filing with the US Securities and Exchange Commission (SEC), the San Francisco-based Metromile digital pay-per-mile auto insurance firm reported that it purchased $1 million in Bitcoins as part of its treasury reserve in June 2021.
Metromile’s Bitcoin acquisition was first reported on Twitter by @MacroScope17. The tweet sparked a discussion over the Bitcoin purchase. Numerous people pointed out how modest the Bitcoin payment was for the digital insurance platform and pay-per-mile auto insurer.
Metromile has only put 0.5 percent of its capital in Bitcoin, according to the study, while it would have been preferable if it had spent at least 5-10 percent. Metromile had $202.584 million in cash at the time of purchase, according to the insurance company’s second-quarter financial reports.
However, such purchases indicate that crypto acceptance is growing, and businesses are taking the risk of investing in Bitcoin.
In May, Metromile announced that it will soon acquire more Bitcoins and that policyholders would be able to pay for insurance and get reimbursement for qualified and approved covered claims using Bitcoin.
Dan Preston, CEO of Metromile, commented on the news, saying:
“We believe in the transformative potential of blockchain technology. We are still in the early days of realising how this shift to decentralised finance and cryptocurrency will create enduring advantages in insurance. Still, we believe that offering bitcoin as an option for premium and claims payments would be an important first step.”
Why are businesses so interested in Bitcoin?
Blockchain and Bitcoin technologies have opened up new possibilities for various people (traders and investors) and industries (real estate, finance, etc.). Institutional investors are rapidly entering the crypto environment as bitcoin knowledge and usage grows. In addition, many firms and businesses have already begun to accept Bitcoin and other cryptocurrencies as payment for products and services.
The Nasdaq-listed insurance company Metromile has joined a growing list of companies that purchased Bitcoin for their balance sheet. Public businesses like MicroStrategy, Square, Tesla, and others bought Bitcoins as part of their treasury reserve a few months ago. MicroStrategy made news when it announced that it had invested more than 90% of its treasury assets in Bitcoin.
What looks to be a wise decision for them may not be so for another company. On the other hand, these firms are not speculating and have been very deliberate in their decision-making. Of course, these publicly traded firms have utilized their treasury cash to invest in Bitcoins to increase shareholder value.