Greenpro Capital Corp (NASDAQ: GRNQ) is screaming for the top in the market this morning, trading on gains that are better stated in multiples than percentages. The gains come after the company announced that it will set up a fund for Bitcoin investments. Here’s what’s happening:
Skip to What You Want to Read
- Greenpro Capital Announces the Launch of a Bitcoin Fund
- Management Commentary
- Why Investors Are Excited
- Risks to Consider Before Buying GRNQ Stock
- Final Thoughts
Greenpro Capital Announces the Launch of a Bitcoin Fund
In the press release, Greenpro Capital said that it intends to set up a Bitcoin Fund for investment.
The company went on to explain that it believes the ongoing mass adoption of Bitcoin by banks, hedge funds, insurance companies, and institutions suggests that the cryptocurrency will continue to climb in value. As a result, the company believes that by adding Bitcoin to its activities will produce significant value for the company and its investors.
The company went on to explain that investments in Bitcoin, Ethereum, and other cryptocurrencies gives the company the opportunity for a better return and a stronger ability to preserve capital than holding cash.
GRNQ went on to explain that the move into cryptocurrencies follows the CEO’s recent receipt of an Honorary PhD in Finance and cryptocurrencies from Rivera University in France.
Finally, the company said that it will use CryptoSX, its subsidiary, to acquire Bitcoin stake.
In a statement, CK Lee, CEO at GRNQ, had the following to offer:
We fully believe in $BTC as a store of value. I’ve instructed our investment bankers to raise debt in Q1, 2021 of up to US$100 million to invest in $BTC. The Company will also invest its own cash into $BTC.
Why Investors Are Excited
Several companies have announced an entrance into Bitcoin recently, and few of them have seen gains in multiples. So, what’s so special about Greenpro Capital?
Well, it starts with timing.
Bitcoin has seen tremendous gains in value as of late, climbing to new record highs on a regular basis as widespread adoption of cryptocurrency takes hold. Jumping in now means that the company is jumping in while investors are excited about the potential of Bitcoin.
At the same time, GRNQ stock trades with a pretty small float and some heavy short interest. That means that as investors sent the stock upward, shorts began losing money. So, they began racing to cover their positions and cut the bleeding, leading to tremendous volume and incredible gains in what’s known as a short squeeze.
Risks to Consider Before Buying GRNQ Stock
If you’re going to invest, you’re going to have to be willing to accept risk. When it comes to an investment in GRNQ stock, investors should consider the following:
- GRNQ Doesn’t Make Money. Sure, the company generates revenue, but it’s got as much going out as it does coming in. In its most recent earnings report, there were no profits, and no losses. This is a pivotal time. The company must push for profits, should it fail to produce profits, it may need to look to capital markets for funding, leading to dilution for existing shareholders.
- Penny Stock Risks. GRNQ is a penny stock. That means that it is riddles with volatility and its business model is largely unproven. Considering its status as a penny stock, an investment in Greenpro Capital will come with additional risks.
- Speculation. Finally, the excitement today surrounds speculation that Bitcoin and other cryptocurrencies will reach mass adoption and continue to fly. However, there are major utility issues with bitcoin that may lead to a plateau very soon. Ultimately, any investment in anything crypto at this stage is a highly speculative one.
While there are risks to consider before buying Greenpro Capital, it’s a very exciting opportunity at the same time. The company is on the verge of profitability and its investments in cryptocurrency will likely push it into profits.
Moreover, I hold the same belief as the company in terms of cryptocurrency. Ultimately, Bitcoin and others are seeing incredible adoption, not just among consumers, but among banks, and various other entities. As a result, demand is likely to continue to climb, leading to more significant gains ahead and further validating the company’s view. As a result, GRNQ stock is one to pay attention to.