Tahini’s restaurants, a Canadian high-speed casual restaurant chain specializing in Mediterranean and Middle Eastern cuisine, integrated Bitcoin into its business in 2020 and have since improved its strategy. Today, Bitcoin accounts for more than 70% of its reserves, making a huge difference in its expansion to 62 restaurants in just 10 years.

“We’ve continued to put more and more money into Bitcoin,” Omar Hamam, CEO and co-founder of Tahini, told Bitcoin Magazine. Omar and his brother Allie Hammam founded the company in 2012, starting with one restaurant in London, Ontario. Tahini has since grown to 62 restaurants nationwide, amplified in 2020 by adopting an early Bitcoin financial strategy, partly inspired by Michael Saylor.

“We’re competing with MacDonald’s and Chipotle,” Omar said. “All of these companies have more money than 100 Tahini, so we have that advantage of having a balance sheet strategy that puts our finances financially.

The company has implemented several innovative strategies throughout its journey, including rolling out to many of Bitcoin ATM franchises. This has, according to Aly, “3 billion views across social media platforms over 3 billion views over the past five years.”

The appeal of Bitcoin after Bitcoin affected by Egyptian currency devaluation

Aly Hamam was the main driver of the restaurant’s Bitcoin strategy. The devastating consequences of runaway inflation have been very personal to him, as shaped by family experiences in the aggressive underestimation of the Egyptian Pound over the past 20 years. “So I’ve come from Egypt and over the past 20 years I’ve seen Egyptian pound drop perhaps 85% or something like that, and I’ve seen our family struggle. My parents sat in Egypt and had money during that time.

When Covid-19 market panic occurred in March 2020, Bitcoin prices went low from $10,000 to $4,000. “I bought a bit as a gimmick, but it was just so down, so yeah, I might buy it… the more I studied, the more I fell hard from the rabbit hole. More,” Ally explained.

After the crash, Bitcoin returned to about $10,000, with governments around the world preparing to respond to Covid-19, unlocking trillions of newly printed dollars into the global economy and consolidating them for months. Interest rates in the US fell to zero, and Covid-19 support checks began flowing to anyone in Canada who filled out the form. “The government was literally just printing money non-stop, and it wasn’t just the Canadian government. It was all the governments out there that were doing that. So there’s probably an inflation problem.” Half of Bitcoin was also going on around that time. This is an additional fundamental force that led to one of the most impressive Bull runs in its history.

This was the same era when Michael Saylor famously entered the industry and became the most famous Bitcoin Bull ever. However, many Saylor’s speeches and documents on how to build a company’s Bitcoin strategy and how to persuade boards and other business partners were just beginning to hit the podcast circuit, and the Bitcoin Treasury Playbook was still in its infancy.

When Aly got “100% in,” he began orange-pipping his family. “So I started buying it personally by my business partners, my brothers, my cousins ​​and they personally.” Personally they all started buying bitcoin in small quantities, but using the company’s reserves was a much more difficult process. “It wasn’t fast. It was a messy idea on the edge that they wanted the company money to be put into Bitcoin.” “This” and “it” and announced that Michael Saylor set it up like every account.

Acquisition price, DCA strategy, and tenacity through the bare market

Tahini’s Bitcoin investment strategy differs from today’s public companies that issue stocks (and other financial instruments) to purchase Bitcoin and add them to their reserves. As a private company that began accumulating Bitcoin before US ETFs were approved, Tahini took a simpler approach. According to Omar, Bitcoin today represents more than 70% of the company’s reserves.

Their timing was great, but they started buying bitcoin for their Treasury for around $10,000, but the strategy known as “dollar cost average” works very well, even in the bare market, regardless of price. For example, take a look at this DCA calculation.

If you start putting $1,000 in Bitcoin every two weeks at the top of the bull market in 2021 (about $70,000 per coin), then lower the average purchase price with every purchase you make at a lower price. As a result, in this example, you are broken and fully positioned in the future bull market on your way out of the bare market that is over $30,000. The only requirement is to have a long-term investment mindset.

“I buy it every month, every month. Ups and downs. I feel it sounds too simple, but in reality this is the only way. It’s correct. You just need to put aside the good numbers every month, in my opinion. He said, “I have this conversation with a lot of people. Friends, family, everyone. And I always talk to them, start somewhere and don’t see how it works for you. It’s right. Million, what happened to that amount?”

There are no difficult rules for the optimal frequency of Bitcoin’s DCA strategy, but even for individuals and businesses, Tahini chose to buy monthly as it makes sense considering the accounting process. “Every month we have a P&L. We see profits and losses every month. And at the end of the month, we’ll put this aside,” Omar explained.

Regarding the amount, Omar explained that he has not invested any fixed or percentage-based amounts. “And are you investing back in business this month? We aren’t? What are our expenses like? Are there any big payments? So there are all these expenses at the end of the year. So you have monthly highs and more.

To sell your Bitcoin or get a mortgage?

When it comes to monetizing their Bitcoin Tahini, they chose a simple strategy. If time is right and business opportunities demand it, they sell Bitcoin and buy back later according to standard DCA strategies and integrate capital gains tax into accounting flows. Omar said, “When the time comes to reinvestment, you always need money. So let’s say you want to do a huge marketing campaign as a franchise. You need to immerse yourself in those savings.

Challenges regarding Bitcoin payments and acceptance of POS integration

As one of the first steps in Bitcoin integration, Tahini has investigated the possibility of accepting Bitcoin as a payment at restaurants. However, a series of challenges arise and they are forced to pivot. Many of these challenges remain in businesses around the world and include models of entrenched, closed sources and murals for popular payment processing systems.

“Many of these POS systems companies have their own payment processing and do not have the ability to accept Bitcoin in their systems,” Omar explained about the merchant grade POS world. Many of these systems are closed sources with very restrictive APIs that the Bitcoin economy cannot easily integrate, and since its inception has been a problem of adopting Bitcoin payments.

However, the friction with merchant recruitment is deeper than just a PO moat. The merchant on the feature list needed to stay competitive is extremely complicated, and most Bitcoin payment systems today are still behind.

“The POS system isn’t just about payments. There’s also about how to build menus in the background. The POS system provides reports. It’s a way to ask what they sell, what these stores do when they sell, what they do, what they’re busy, not busy, whatever they order. The payment system is also great as a system.”

In addition to that, POS systems that integrate Bitcoin should support Fiat currency and further increase barriers to entry and competition, as they are viable for today’s regular merchants.

As a result, Tahini did his best next. They chose to add Bitcoin ATMs to 10 restaurants in a partnership with Canadian Bitcoin ATM company, bringing all profits from Bitcoin machines and assigning them to separate accounts for each restaurant. Aly reports that these ATMs have only brought in about $250 in CAD a month since 2021, but these “SATs are flowing” – as some people in the industry totally increase in Bitcoin prices, each of these restaurants has more than $40,000 in Bitcoin per their corresponding restaurant.

Nonetheless, Omar is optimistic that these barriers will decline as interest in Bitcoin payments are more intense than ever. “I think Bitcoin is really growing rapidly, and now it’s being adopted by a lot of companies, people are learning more and more about Bitcoin and are realizing more about Bitcoin.

The European Union’s insurance authority has proposed a blanket rule that would mandate insurance firms to maintain capital equal to the value of their crypto holdings as part of a measure to mitigate risks for policyholders.

The new proposal — made by the European Insurance and Occupational Pensions Authority in a Technical Advice report to the European Commission on March 27 — would set a far stricter standard than other asset classes, such as stocks and real estate, which don’t even need to be half-backed.

“EIOPA considers a 100% haircut in the standard formula prudent and appropriate for these assets in view of their inherent risks and high volatility,” it said in a separate statement.

Such a measure would fill a regulatory gap between the Capital Requirements Regulation and Markets in Crypto-Assets Regulation (MiCA), EIOPA said, noting that the European Union’s regulatory framework for insurers currently lacks specific provisions on crypto assets.

EIOPA outlined four options for the European Commission to consider — one: make no changes; two: mandate an 80% “stress level” to crypto assets; and three: mandate a 100% stress level to crypto asset.

The stress level percentages determine how much capital firms need to hold to stay solvent.

The fourth option called on the European Commission to consider the risks of tokenized assets more broadly.

EIOPA said option three would be the most appropriate option.

“An 80% stress to the value of crypto-asset exposures does not appear sufficiently prudent,” whereas “a 100% stress is more appropriate and aligns with one of the approaches to the transitional treatment of crypto-assets under CRR,” EIOPA said.

The 100% stress refers to the assumption that the crypto asset prices could fall by 100% and that diversification — spreading the risk across different assets — wouldn’t not reduce this stress. EIOPA pointed out that Bitcoin (BTC) and Ether (ETH) have fallen 82% and 91%, respectively, in the past.

A 100% capital charge for crypto assets would reflect a far stricter approach compared to stocks, which range between 39% and 49%, and real estate, which incurs a 25% capital charge, according to solvency capital requirements laid out in the Commission Delegated Regulation 2015/35.

EIOPA said a 100% capital charge for crypto asset-related (re)insurance undertakings shouldn’t be “overly burdensome” and that there would be no material costs for policyholders.

“The capital requirements would fully capture the risk of crypto-asset with a positive impact on policyholder protection in case there are material exposures in the future.”

Related: Tabit offers USD insurance policies backed by Bitcoin regulatory capital

EIOPA acknowledged that the share of crypto-asset (re)insurance undertakings accounts for just 655 million euros or 0.0068% of all undertakings in Europe — even referring to it as “immaterial.”

“At the same time crypto assets are high risk investments which may result in total loss of value,” EIOPA said, explaining why it recommends option three.

Luxembourg and Sweden could be hit hardest by the proposed rule

Insurers in Luxembourg and Sweden are likely to be the most affected, according to a Q4 2023 report cited by EIOPA, which found that these two countries accounted for 69% and 21% of all crypto asset-related exposures among (re)insurance undertakings.

Ireland, Denmark and Liechtenstein also accounted for 3.4%, 1.4% and 1.2% of the undertakings. 

Most of these undertakings are structured within funds, such as exchange-traded funds, and held on behalf of unit-linked policyholders, EIOPA noted.

EIOPA, however, acknowledged that a broader adoption of crypto assets in the future may require a more “differentiated approach.”

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