Tech Co. Goes Public, Looks to Debut 'Digital Gold' Offering

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Matador Technologies Inc. (MATA:TSX.V), which is focused on digitizing real world assets (RWAs) using blockchain technology beginning with digital gold, is now listed on the TSX Venture Exchange, the company announced.

Matador trades under the ticker MATA. It also holds Bitcoin on its balance sheet and "will continue to explore how to use the Bitcoin blockchain as a platform for its current and future products," the company said in a release.

"Bitcoin is in the early days of an expansion from a store of value to a computing layer that powers markets and real-world assets," said President Sunny Ray. "We believe that the new assets and companies built on top of Bitcoin have the potential to quickly reach mass adoption."

The Toronto-based technology company said it is dedicated to expanding the utility of real-world assets by merging them with blockchain features and functions. Its first killer app? Gold, of course.

Starting in Q1 2025, the company said it plans to offer "digital gold," partnering with world-class artists to create unique collections when they take physical delivery of the commodity "while merging this offering with blockchain protocols."

"Taking Matador public marks a new chapter in our journey to bridge traditional and blockchain-based financial systems," said Chief Executive Officer Deven Soni. "We are excited to give retail and institutional investors access to what we believe is the most exciting part of the real-world asset ecosystem."

'Bitcoin and Gold'

In 2022, gold was the world's seventh-most-traded product for a total of US$478 billion, or about 2% of total world trade, according to the Observatory of Economic Complexity (OEC). While its price per ounce has shown some recent volatility, it reached an all-time high of US$2,788.54 in October, and many experts believe it is still in a bull market. It was US$2,602.92 per ounce at the time of writing.

Tapscott said that, like ETFs, which were created more than 30 years ago and now hold US$6.8 trillion in assets, "the tokenization revolution will take some time . . . But I think we're here."

Much like gold's traditional use as a vessel to store value and hedge against inflation, Bitcoin is attracting traders looking to profit from its price changes. The price of a Bitcoin (which hit more than US$100,000 this week) has more than doubled from Mach 2024.

Entrepreneur, business author, and seasoned capital markets professional Alex Tapscott, who co-wrote the bestselling book Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business, and the World, and the more recent Wall Street Journal Bestseller Web3, owns 0.04% of Matador's stock, according to Refinitiv.

He told Streetwise Reports that while gold is doing well, it was clear that "Bitcoin and other assets have captured the imagination of a younger generation that might have otherwise been interested in gold."

"To me, these are both things that should be cornerstones of anyone's portfolio," he said. "So how do we get access to it? Well, one of the problems with gold investing is that the way in which people invest in gold hasn't evolved all that much since the start of the industrial era . . .  For most of the world's population, it's all still physical gold bullion."

Bitcoin's Roots

Bitcoin was the first decentralized cryptocurrency, a digitized alternative form of payment created using encryption algorithms. It was invented in 2008 by Satoshi Nakamoto and began being used as a currency in 2009. Nodes in the peer-to-peer network verify transactions on a distributed ledger called a blockchain.

And that blockchain can contain just about anything. A newer invention called crypto tokens is a digital representation of an asset or interest in something built on a blockchain, according to Investopedia.

Tapscott described tokens as just "a container for value," like a shipping container. It can contain whatever is needed but its use makes the shipping and financial industries "that much more efficient."

"They allow anyone anywhere in the world who's connected to the internet to be able to move and store value and to build wealth," Tapscott said. "But to me, one of the assets that is like the biggest, ripest, juiciest target for tokenization is the store of value asset that people have been relying on for (thousands of) years, which is gold."

Blending Art and Blockchain Technology

How does it work? Soni said the company places an automated order for gold in real-time as the tokens are purchased, always ensuring they have an excess, which is stored in the Royal Canadian Mint. According to the company's investor presentation, it is partnering with blockchain artists to create exclusive collections of 1,000 digital artifacts etched on physical gold, "blending art and blockchain technology."

Matador also plans to incubate other real-world assets that take advantage of the blockchain's massive user base and application layer, which can launch other kinds of assets.

Tapscott said that, like ETFs, which were created more than 30 years ago and now hold US$6.8 trillion in assets, "the tokenization revolution will take some time."

"But I think we're here," he said.

Adding Bitcoin to Its Balance Sheet

On Monday, the company announced that it was adding Bitcoin and U.S. dollar-denominated assets to its corporate treasury as part of its "long-term capital preservation strategy."

Matador said it plans to front-load an initial allocation of CA$4.5 million into Bitcoin this month and will continue to explore additional purchases at the Board level via measured buying programs. Additionally, the company said it will move the majority of its cash balance sheet from Canadian dollars to U.S. dollars.

"The Board has identified risks associated with its current treasury, which is primarily denominated in Canadian dollars," Matador said in a release. "Canada's reliance on oil exports and its rising national debt raise concerns about potential devaluation and loss of purchasing power for Canadian-denominated assets. To address these risks, the Board has approved adding Bitcoin and USD-denominated assets to its corporate treasury."

"Matador's Board and management believe in using Bitcoin to future-proof our treasury," Ray added in the release. "This step also supports our mission to explore using Bitcoin as a platform for our gold-based products."

The Catalyst: Growing Markets

Gold prices found gains on Friday, supported by a softer dollar and treasury yields after U.S. economic data indicated a slowdown in inflation, although the Federal Reserve's hawkish interest rate outlook kept bullion on track for a weekly loss, according to Reuters.

"Gold continues to trade within a range between two key price levels," Bruce Powers wrote for FX Empire. "The direction of the breakout could lead to a continuation in whichever direction that is. At the top of the price range is last week's high of US$2,675. A sustained breakout above that price level triggers a bullish continuation of the trend starting from the November low and puts gold in a position to test higher targets, around US$2,750 and US$2,790.

FX Empire's A.G. Thorson recently predicted a run towards US$3,000-plus gold by next March or April.

Writing for Money on December 4, Marc Guberti noted that gold was up by more than 31% in 2024 and delivered more than an 82% gain over the past five years. "Many big banks believe that gold is set to continue its rally in 2025 and beyond," he wrote.

According to Grand View Research, the global Bitcoin market size was valued at US$17.05 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 26.2% from 2022 to 2030 as the platform can deliver cheaper and faster payments, less volatility, and also enables secure transactions.

"As a result, Bitcoin can also be used as a store of value, other than as a medium of exchange for products and services across the globe," researchers said. "Moreover, with the emergence of Bitcoin, financial transactions no longer require central authorization and are settled immediately." 

Ownership and Share Structure

According to the company, 65% is owned by management and insiders, including Founder and Director Donato Sferra, Vice President of Finance Geoff St. Clair, Director Richard Murphy, Soni, a strategic investor (through UTXO Management, LLC and 210K Capital, LP), Director Tyler Evans (through UTXO Management, LLC and 210K Capital, LP), and Founder Trevor Koverko, among others. 

The rest, about 35%, is retail, and includes Hive Digital with 3%, Kitco Metals with 1%, and Gold Fields Ltd. with 4%, the company said.

It has about 91.8 million shares outstanding and has a market cap of CA$60.41 million at the time of writing. It trades in a 52-week range of CA$0.11 and CA$0.90.