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Numerous large corporations and institutions entered the bitcoin space in the last year or so with substantial purchases worth billions of dollars in total. Keeping in mind that some of those names were giants like Tesla, MicroStrategy, Ruffer Investment, and MassMutual, it’s quite normal that they all made the news more than once.
But what about the so-called little guy? Being considered as a highly-volatile and risky asset with a little over a decade-long history, BTC doesn’t sound like the preferable asset for smaller businesses to put on their balance sheets, right?
However, that doesn’t seem to be the case for a small husband-and-wife-owned pizza business with two joints in Alabama, the US, called Sam & Greg’s Pizzeria/Gelateria.
Greg Hathorn, the co-owner (also known as the husband), recently commented on a Michael Saylor endorsement of Square’s $170 million BTC purchase that they had moved $200,000 off their business’ balance sheet into the primary cryptocurrency.
CryptoPotato reached out to the Hathorns to find out more about their decision, thoughts on bitcoin, exit strategy, and everything in between.
Why Bitcoin, Greg?
Arguably the most profound question for every (new) investor is why he or she has decided to allocate funds in a certain asset – or as a popular US-British author wrote once – “it all starts with the why.”
Greg shared with us that his background was in IT, despite his ongoing restauranteur endeavors, and said that cryptocurrency and blockchain technology have been in his sights for quite some time.
While admitting that he was late to the party with his “ah-ha moment”, he believes that “these technologies represent the smartest use of the Internet to date, creating a positive disruption that will shake traditional finance to its core.”
“So, why bitcoin for my business? The simple answer is that I have worked hard to save money, and I don’t like seeing it disrespected and devalued. I also do not appreciate politicians and central banks reducing the value of the American worker to the speed of a printer. Bitcoin solves these problems.
The simple forces of a fixed supply and unlimited demand are in play, making bitcoin the obvious choice as the go-to store of value for those simply needing a place to preserve capital, no matter what size business.”
350% ROI in Less Than a Year
Greg revealed that the catalyst for this decision came in April 2020 – quite the decisive moment for the cryptocurrency industry as well as the entire financial field. The COVID-19 outburst had just been recognized as a global pandemic and the consequences spread through all financial markets, causing massive nosedives.
Bitcoin was not excluded, as it plummeted by 50% in a day to below $4,000 in mid-March, 2020. However, the Hathorns seem to have taken the Paul Tudor Jones III approach and go into bitcoin as the asset began its recovery.
Nevertheless, BTC didn’t stop with just a mere recovery and went on to new heights in the next eleven months. It’s not a surprise that the Hathorns’ bitcoin investment is “approximately 350% up since we started investing last April.”
Greg noted that he chose to go with Grayscale instead of the “crypto-exchange route because I just didn’t want to deal with maintaining a digital wallet, cold storage/hot storage, keys, etc.” He believes that the GBTC trust is among the most convenient tools for people wanting to receive BTC exposure at the moment but believes that the potential approval of a Bitcoin ETF could be a game-changer.
On the question of their overall strategy going into bitcoin, Greg told us that he’s not actively managing the cryptocurrency position. Instead, he prefers HODLing for now.
However, he plans to treat his “prudent” BTC investment slightly differently in the future – “I will take profits on the way up, and then reinvest on future dips.”
Other Small Business Should Consider Buying BTC Too
While it’s still not a common practice among larger or smaller businesses, Greg believes that every owner or executive should “at the very least, educate themselves on bitcoin” before making a conscious decision on whether or not to buy BTC as well.
“Bitcoin, and cryptocurrency in general, is not going away, so it should not be ignored as being just a fad that will fade.” – he asserted.
Although he acknowledged the asset’s enhanced volatility, Greg doesn’t feel it’s risky – “or at least not riskier than investing in stocks, market ETFs, or just sitting on cash.” He and his wife have invested in BTC funds that are “over and above the operating capital that stays in the business to meet ongoing cash flow needs.”
As such, he’s prepared to face the short-term volatility, despite the “stomach-churning that occurs when bitcoin dips and consolidates,” to “capture massive long-term gains.” Additionally, he feels privileged to participate as an early adopter of this “new Digital Monetary Network – an opportunity I can’t pass up.”
Greg also noted that the company’s BTC investment could ultimately benefit their staff, too, as it suggests job security and potential bonuses. He said that “they were excited” the first time he and his wife announced the bitcoin purchase.
“They felt that if we were able to do that, then the business must be doing well, which translates into job security. But, more importantly, I do plan to incorporate a portion of any Bitcoin profits into our annual bonus pool, which is shared by all employees. So, in a manner of speaking, you could say that our staff is invested in Bitcoin.” – he concluded.