Twenty-two months ago, Aly Hamam didn’t know if his Middle Eastern restaurant in London would survive the COVID-19 pandemic.
“Everything shut down, and our sales dropped 80 per cent in a week,” said Hamam, who owns Tahini’s restaurant alongside his brother Omar and cousin Ahmed.
“It was pretty terrifying,” the 32-year-old said. “We worked day and night, 24-7 to keep the restaurants alive.”
There were three Tahini’s restaurants at that time, all in London. Today, that number is triple the size, spread over a larger territory — nine restaurants across southern Ontario, four in London — as they continue to grow.
“Now we’re at nine locations Ontario-wide, and we’re looking to hit 20 to 25 locations by the end of 2022,” Hamam said.
It’s not just their chicken shawarma or garlic dip that accounts for this company’s growth.
It’s, in part, how the restaurant invests its profits, Hamam says — plowing all of its money into the Bitcoin digital currency.
“We made the move to the corporate balance sheet on a Bitcoin-standard back in August of 2020, and since then, we’re up more than 300 per cent on our initial investment,” Hamam said.
“It’s really done its job of protecting us against inflation and it worked as we intended it to.”
Bitcoin is a type of cryptocurrency — or digital money — that’s stored on a network known as blockchain, a public ledger that records all transactions. Unlike traditional currencies, Bitcoin is a decentralized currency that doesn’t require oversight or an intermediary, like a government or a bank.
Tahini’s does not accept digital currency as a payment for food. Instead, it operates in Canadian dollars and then invests its profit into Bitcoin.
“We keep a working capital for about three to six months in cash, and then the rest all goes into Bitcoin,” Hamam said. “So, whenever we have an expansion, we’re not forced to sell our Bitcoin to fund that expansion. We try to operate conservatively, where we never have to sell our Bitcoin and we just keep accumulating on our treasury.”
It’s a strategy that’s also helped protect them against inflation that’s driven up food prices, Hamam said.
“Due to our macro-economic environment right now, Canadians need a tool like Bitcoin more than ever,” Hamam said, noting inflation and the expansion of M2 money supply, which includes cash and close substitutes and is an indicator of inflation, continues to increase.
“This is a way to protect yourself from inflation because the (Bitcoin) money system is fixed (at a maximum of 21 million units), and it doesn’t matter how much money is being printed globally.”
Tahini’s declined to disclose the sum of Bitcoin on its balance sheet, citing it’s a private company, but Hamam said the restaurant has made more than $8 million in revenue in 2021, almost double from a year prior.
Bitcoin traded for nearly US$12,000 in August when Tahini’s began investing in the currency and was around US$42,000 as of Tuesday.
Though cryptocurrencies have gained popularity among investors and the financial community in recent years, there are risks involved, as prices can climb and fall rapidly.
“It is true that Bitcoin has increased dramatically in price since the beginning of the pandemic,” said Andreas Park, an economist and professor of finance at the University of Toronto. The trading Bitcoin price was $5,000 in March 2020 and hit its peak of $68,000 in November 2021.
“If you put your money into Bitcoin at $5,000 and you sell it at $70,000, you (can make a profit), but that’s not a guarantee that it will continue,” he said.
Park sees Bitcoin as a speculative investment and doesn’t think the currency should be used as a “hedge against inflation.”
“There’s nothing that underlies Bitcoin . . . It has no purpose other than transferring money from one person to another,” he said, adding other types of cryptocurrencies, such as Ethereum, have more utility.
Though exposure to Bitcoin has benefitted Tahini’s, Hamam said, investing its profits into Bitcoin isn’t what he had in mind when he first discovered the currency.
“I was looking for a way to kind of protect my personal wealth and I stumbled upon Bitcoin,” he said.
The more he studied the cryptocurrency, the further it grew from a “fun investment” to “a savings technology” his family adopted, too. “We integrated it into our business, our kids’ educational funds . . . That was one of the best decisions we’ve ever made.”
Tahini’s even has a Bitcoin ATM machine at each of its restaurants to encourage its employees and customers to invest in Bitcoin.
But adopting a “Bitcoin-standard” strategy wasn’t the only pandemic-spurred move for Tahini’s.
The company transitioned from in-person dining to online delivery and launched its own supply-chain company, Alex Food Service. Generating roughly $5 million in the last year, the London-based service distributes Middle Eastern food products to more than 70 restaurants Ontario-wide.
That, coupled with Tahini’s social media engagement — a combined following of more than 383,000 on TikTok, Instagram and Twitter — has created the ideal recipe for expansion.
Tahini’s has restaurants downtown, and in north, south and east London, as well as in Whitby, Barrie, Etobicoke, Hamilton, and most recently, Scarborough.
“It’s definitely been an exciting and exhausting couple of years, but we’re very proud of what we’ve built,” said Hamam. “We’re going to continue to strive to make the best food that we can . . . and with Bitcoin, we’re also wanting to help people financially.”
Bitcoin is a digital currency free of control or oversight from banks or governments.
The decentralized currency is governed by “miners” who have an incentive to maintain a stable supply of the coin.
You can use Bitcoin to buy goods and services online and in stores that accept the currency. Bitcoin can also be exchanged for cash.
The transfer of bitcoin uses blockchain technology, a database that stores information in connected blocks. When new data are entered, a new block is added to the previous one in chronological order.
Goods bought using digital currency like Bitcoin are required to be included in the seller’s income for taxes. HST also applies to the goods bought using the currency.
Bitcoin comes with risks, such as fewer protections for fraud and for re-entering your digital wallet or exchange account if it’s compromised, as well as no federal or provincial deposit insurance.