Worksport allocates $5M for Bitcoin and XRP investments

Shares of Worksport (WKSP) increased by 9.1% on December 5, following the company's announcement to integrate Bitcoin (CRYPTO:BTC) and XRP (CRYPTO:XRP) into its treasury strategy.

The firm plans to invest up to 10% of its surplus operational cash, amounting to an initial investment of $5 million, in these cryptocurrencies.

This decision aims to hedge against inflation and diversify the company's financial assets.

In addition to investing excess cash, Worksport will also begin accepting cryptocurrency payments on its e-commerce platform, which is expected to reduce transaction costs by 37%.

“As Bitcoin and XRP continue to gain investor attention and acceptance as major asset classes, we believe they may serve as strong treasury reserve assets,” Steven Rossi, CEO of Worksport, stated.

He emphasized that the inflation-resistant nature of these digital currencies makes them reliable stores of value.

Worksport, listed on Nasdaq since 2021, manufactures energy solutions for trucks, including tonneau covers that integrate mobile solar power generation systems.

The company intends to convert interest earnings from cash held in money market accounts into Bitcoin and XRP and allocate a portion of future capital raises towards cryptocurrencies.

“By strategically allocating a portion of our treasury to these digital assets and accepting crypto payments, we’re enhancing our financial strategy and aligning ourselves with the future of global finance,” Rossi added.

This move aligns with a broader trend among publicly traded companies utilising cash reserves for digital asset investments.

MicroStrategy was one of the first companies to adopt this strategy in 2020, which has since yielded significant unrealised profits.

Other firms like Coinbase and various mining companies have also added Bitcoin to their treasury holdings.

At the time of reporting, the Bitcoin price was $96,706.19, and the XRP price was $2.25.