Tech Company Secures Major Bitcoin Custody Partnership

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Matador Technologies Inc. (MATA:TSX.V), which is set to launch its digital gold product at the end of the quarter, announced it has selected BitGo Trust Co.  to securely manage and store its Bitcoin holdings.

Matador has integrated Bitcoin as a foundational asset for its treasury, and as the platform for the digital gold product, which will combine the tangible value of physical gold with the security of the Bitcoin blockchain, the company said.

In a release, Matador said BitGo is known for its secure and compliant custody solutions and will "provide institutional-grade custody services using its security infrastructure."

"We are pleased to partner with BitGo as our trusted custodian for Bitcoin," said Matador Chairman and Chief Executive Officer Deven Soni. "As we expand our engagement with digital assets, having a secure custodian like BitGo supports our security and compliance priorities."

BitGo offers a full suite of custody solutions, including multi-signature wallets and 100% cold storage technology, providing protection against theft, loss, or unauthorized access, Matador said. Additionally, its insurance policy provides an added layer of security.

"At BitGo, we are focused on providing secure custody for institutional clients," BitGo Chief Executive Officer Mike Belshe said. "We look forward to supporting Matador's Bitcoin custody needs with our security infrastructure."

Expanding Its Treasury

Last week, Matador announced it had acquired an additional 3.46 bitcoin for CA$500,000 (US$344,257) at an average price of US$99,580 per bitcoin, inclusive of fees and expenses.

The acquisition brought Matador's Bitcoin holdings to about 68.14 bitcoin (and Bitcoin equivalents). The company said it also maintains cash reserves of about CA$1.8 million and physical gold holdings of 2 kilograms (about CA$287,000).

The company said it continues to operate debt-free, with all Bitcoin (and Bitcoin equivalent) holdings free and clear.

The company's technology pairs its digital gold product with digital art on the Bitcoin blockchain. The gold is sourced through the Royal Canadian Mint through a partnership with Kitco Metals Inc. All physical gold holdings will remain stored at the Mint.

"Matador continues to integrate Bitcoin into its long-term strategy, reinforcing its role as a core treasury asset and the platform of choice for its upcoming digital gold platform," the company has said. "As Matador advances its growth strategy, the company remains committed to expanding its treasury holdings of Bitcoin and gold, leveraging blockchain technology, and delivering long-term value for stakeholders."

Blending Gold and Digital Art

The launch of Matador's digital product, which will blend gold ownership with digital art, is part of a larger vision to merge traditional finance with progressive digital tools, the company has said.

"Bitcoin and other assets have captured the imagination of a younger generation that might have otherwise been interested in gold," said Alex Tapscott, an entrepreneur, business author, and seasoned capital markets professional, who owns 0.04% of Matador's stock, according to Refinitiv.

"To me, these are both things (Bitcoin and gold) that should be cornerstones of anyone's portfolio," he said.

However, the way people invest in gold has never really changed in modern times, said 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.

The first decentralized cryptocurrency, Bitcoin is a digitized alternative form of payment created using encryption algorithms. Nodes in a peer-to-peer network verify transactions on a distributed ledger called a blockchain that can contain just about anything. A newer invention called crypto tokens allows 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" and can contain whatever is needed. Soni said the company places an automated order for gold in real-time as Matador gold is purchased, always ensuring they have an excess 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."

The Catalyst: Safe Haven Strength Sends Gold to New Highs

Gold prices continued setting records and broke through the key US$2,900 level for the first time on Monday, driven by safe-haven demand as U.S. President Donald Trump's new tariff threats amplified trade war and inflation concerns, according to Anmol Choubey of Reuters.

Spot gold surged 1.6% to US$2,905.24 per ounce, as of 1:45 p.m. ET after hitting a record high of US$2,911.30 earlier in the session.

"Obviously, the tariff war is behind the rise; it just reflects more uncertainty and more tension in the global trade situation," Marex analyst Edward Meir said, according to Choubey.

Tariffs may exacerbate U.S. inflation, with investors awaiting U.S. Consumer Price Index (CPI) and Producer Price Index (PPI) data due later in the week. Federal Reserve Chair Jerome Powell is also due to testify before Congress on Tuesday and Wednesday, Reuters reported.

Bullion has already hit its seventh record high this year. According to Choubey's report, Phillip Streible, chief market strategist at Blue Line Futures, said gold's 45-degree rally since December might create a self-fulfilling prophecy of further price increases, potentially leading it to raise its forecast to around US$3,250 or US$3,500.

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, Grand View Research said.

The platform can deliver cheaper and faster payments, less volatility, and also enables secure transactions, the firm said.

"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 91.86 million shares outstanding and has a market cap of CA$45.47 million at the time of writing. It trades in a 52-week range of CA$0.11 and CA$0.90.