Bitcoin Sparks Investment Frenzy Among Listed Companies

Recently, Bitcoin has once again become the focus of the financial market. The price of Bitcoin surged to 73,660 USD, almost reaching a historical high. In the current political environment, the market generally expects that by the end of the year, the price of Bitcoin may reach 100,000 USD.

This trend has attracted the attention of publicly listed companies. A well-known tech giant recently submitted documents to the U.S. Securities and Exchange Commission, stating that it will vote on the topic of "assessing investment in Bitcoin" at the upcoming shareholder meeting. Although the company's board of directors recommended opposing the proposal, opinions among shareholders are divided.

As a globally renowned company, the mere consideration of investing in Bitcoin has far-reaching implications. On the other hand, a software company that has long invested in Bitcoin has profited significantly from this surge, setting an example for other listed companies.

Tech giants consider investing in Bitcoin, board holds opposing view

Due to recent political factors, Bitcoin has once again become an investment hotspot. Although the price has slightly retreated after approaching historical highs, Bitcoin has risen over 56% since the beginning of this year, outperforming other major asset classes and demonstrating strong anti-inflation and anti-cyclical characteristics.

The characteristic of this "digital gold" has not only attracted retail investors but also caught the interest of publicly listed companies. According to documents from the U.S. Securities and Exchange Commission, a tech giant will vote on "assessing investment in Bitcoin" at the upcoming shareholder meeting.

The proposal was initiated by a conservative think tank within the company, recommending that the company invest at least 1% of its total assets in Bitcoin, arguing that "companies should consider Bitcoin as a hedging tool to protect shareholder value." However, the company's board of directors advised shareholders to vote against it.

The board explained that the company's global financial and investment services team has conducted a comprehensive evaluation of various investable assets, including those that can provide diversification and inflation protection. Bitcoin and other cryptocurrencies have been considered, and the company will continue to monitor relevant trends and developments.

The board emphasized that the high volatility of Bitcoin is a key factor in the assessment. Although crypto assets may have potential, their dramatic price fluctuations could adversely affect the balance sheets of listed companies.

The final decision will depend on the attitude of the majority shareholders. The company's two major institutional shareholders have different positions on cryptocurrency: one has launched a Bitcoin ETF and expressed support, while the other has clearly stated that it will not provide crypto-related products.

Regardless of the voting results, the actions of this tech giant in considering an investment in Bitcoin are significant in themselves. It indicates that Bitcoin is gradually gaining mainstream recognition, which may prompt more publicly traded companies to consider incorporating Bitcoin into their financial strategies.

It is not new for listed companies to invest in Bitcoin.

In fact, several listed companies have already invested in Bitcoin. Data shows that currently there are 29 listed companies holding Bitcoin, with a total of 360,000 coins, worth over 2.6 billion dollars. The most representative is a certain software company.

The company announced its investment in Bitcoin for the first time in August 2020, purchasing 21,454 Bitcoins for $250 million. Since then, regardless of market fluctuations, the company has persistently bought Bitcoin. As of the third quarter of 2024, the company has invested approximately $9.9 billion in purchasing 252,220 Bitcoins, making it the publicly traded company with the largest Bitcoin holdings in the world.

This strategy has brought substantial returns to the company. The company's average purchase price for Bitcoin was around $39,266, while the current price of Bitcoin has risen to about $72,000. The company's stock price has also surged, reaching a 25-year high, with a market capitalization entering the $50 billion club. Reports indicate that the company's stock performance over the past two years has outperformed the vast majority of large U.S. stocks.

In addition, there are other well-known companies that hold a large amount of Bitcoin. A certain electric vehicle manufacturer purchased $1.5 billion worth of Bitcoin in February 2021 and currently holds $763 million worth of Bitcoin, ranking fourth among public companies in terms of holdings. After reducing its holdings by 75% in the second quarter of 2022, the company has not sold any Bitcoin for two consecutive years, demonstrating a positive outlook on Bitcoin in the long term.

Conclusion

Overall, while some company boards are cautious about investing in Bitcoin, in the long run, as the value of Bitcoin increases and the process of mainstreaming advances, it may become common for listed companies to hold Bitcoin. Currently, the volatility and compliance of Bitcoin remain the main challenges faced by listed companies.

However, the regulatory environment is gradually improving. The Financial Accounting Standards Board (FASB) has issued new rules allowing for the accounting of Bitcoin at fair value for fiscal years after December 15, 2024. This change will address the accounting treatment issues faced by publicly listed companies when holding Bitcoin, and is expected to further promote the trend of publicly listed companies investing in Bitcoin.