Author:Ada

MetaEra reported from New York, as of December 15, 2024, Nano Labs possess approximately 360 bitcoins, with a total value of approximately $36 million at current prices. According to Coingecko data on December 15, Nano Labs ranked 21st in terms of the number of Bitcoin reserved by listed companies.

On December 5, 2024, Bitcoin broke through $100,000, and the cryptocurrency market was cheering. The prediction made by Jack Kong, the founder of Nano Labs (Nasdaq: NA), about Bitcoin reaching $100,000 many years ago was also realised on this day.

It wan also on that day, Nano Labs announced that it would open a trading account at the Hong Kong-licensed exchange HashKey Exchange and planned to invest $50 million in Bitcoin virtual assets. The stock price of Nano Labs rose from $6 per share in early November to nearly $13 per share at the close of December 5.

Jack Kong said in an interview with MetaEra that Bitcoin has now reached a new stage. It has changed from an investment target for retail investors to a reserve asset for some institutions or governments. He believes that the risk of public companies holding Bitcoin has reached an acceptable level, and it can bring relatively good profit prospects to the company. This is also one of the motivations for Nano Labs to announce its Bitcoin investment. "In the future, we will reserve Bitcoin for a long time."Jack Kong said.

Bitcoin has risen by more than 140% this year. The victory of  Trump in the US election and his friendly attitude towards the cryptocurrency industry have become the catalysts for this uptrend round. Behind the huge influence and discussion, the boundaries of Bitcoin are constantly expanding.

More and more public companies have taken Bitcoin as a reserve asset, and this trend is spreading from American public companies to Chinese listed companies. According to incomplete statistics, there are currently more than 60 listed companies in the world holding different amounts of Bitcoin.

With the rising popularity of Bitcoin, there are more and more discussions about listed companies reserving Bitcoin. What are the motivations of reserving Bitcoin? As listed companies, how to deal with the risks brought by Bitcoin's volatility? What kind of strategy should listed companies have when reserving Bitcoin?

Public companies compete to buy Bitcoin

In this "Bitcoin hoarding wave", MicroStrategy, a US listed company, is undoubtedly the pioneer .

As early as 2020, Michael Saylor,founder of MicroStrategy,  announced that Bitcoin would be part of the company's assets. At that time, MicroStrategy's "Bitcoin Strategy" began.

The "Bitcoin strategy" has brought MicroStrategy both stock and cryptocurrency profitability. So far, its stock price has increased by 3,000% and its market capitalization has exceeded $100 billion. As Bitcoin breaks through $100,000, MicroStrategy's total rate of return has reached 63.3% since the beginning of the year.

Stimulated by the huge economic benefits, many US-listed companies began to follow MicroStrategy's Bitcoin strategy and buy Bitcoin as a reserve asset.

According to the data from Bitcoin Treasuries, since November, fitness equipment manufacturer Interactive Strength announced an investment of $5 million to purchase Bitcoin; artificial intelligence company Genius Group spent $14 million to purchase 153 Bitcoins; medical company Semler Scientific approved an investment plan for 1,570 Bitcoins. In addition, many companies such as Rumble, Anixa Biosciences and LQR House also joined the rank of Bitcoin investment.

In addition to spending money on Bitcoin, e-commerce platform LQR House Inc. (LQR) is also accepting cryptocurrency payments on CWSpirits.com, giving customers the flexibility to purchase alcoholic beverages using digital currencies. As part of the initiative, LQR House has adopted a policy to retain up to $10 million in crypto payments as Bitcoin.

The investment boom of Bitcoin soon spread to Chinese listed companies.

In addition to Nano Labs mentioned above,  US-listed Chinese companies SOS Ltd also invested in Bitcoin. It announced an investment of $50 million to buy Bitcoin. Other Chinese listed companies such as Boyaa Interactive International Ltd, Coolpad Group Ltd, GoFintech Innovation Ltd, and NetDragon Websoft Holdings Ltd have also joined the rank of Bitcoin investment.

It is worth mentioning that Boyaa Interactive International, a Hong Kong-listed company, converted its reserve of $49.48 million Ethereum into Bitcoin from November 19 to November 28, and finally obtained 515 Bitcoins. It was this decision that brought its Bitcoin possessing number to 3,183. This number exceeded the Japanese listed company Metaplanet, and made Boyaa became the largest Bitcoin corporate holder in Asia.

According to the observation from Jack Kong, the listed companies which currently hold Bitcoin can be divided into three main categories: one is digital currency companies or companies doing Web3 projects, whose main operation sectors include digital currency-related businesses; secondly, companies in the Crypto Miner ecosystem tend to reserve Bitcoin for a long time, such as Canaan Creative and No.9 City Information Technology etc; and finally, some technology, game or Internet companies regard  Bitcoin as part of their asset portfolio, and reserve transboundarily，such as Boyaa Interactive and Meitu.

Jack Kong believes that it will be a long-term trend for listed companies to reserve Bitcoin. In terms of the strategy, he said that Bitcoin should be allocated and held without affecting the company's cash flow. "In this way, the short-term fluctuations of Bitcoin will not have a substantial impact on the company's operations," Jack Kong said.

At the same time, Nano Labs' strategic reserve of Bitcoin has also been recognized. Recently, Nano Labs announced a plan for  private placement, raising a total of $36.25 million. Participants in the private placement include Fenbushi Inc -US、Longling Capital、Golden Forest Management Limited,etc。

Is it a long-term plan?

In the evening of December 4, Meitu issued an announcement on the Hong Kong Stock Exchange, stating that it had sold all its cryptocurrencies, including approximately 31,000 Ethereum coins and 940 Bitcoins, making a profit of approximately $79.63 million (equivalent to approximately RMB 571 million).

Meitu purchased cryptocurrency for the first time in March 2021. In the past three years, Meitu's investment rate of return on cryptocurrency has been approximately 44%. Although Meitu has made huge profits from the investment, it has also attracted a lot of controversy.

According to The Paper, many netizens had negative attitudes toward Meitu's purchase of digital currency. Some analysts also believed that Meitu's short-term behavior was "vagrancy" and was suspected of speculation.

In the view of Jack Kong, whether it’s a short-term speculation or long-term allocation for listed companies to buy Bitcoin, it shows a hot spot of Bitcoin in the market. In essence, it promotes the spreading of Bitcoin and Web3, which is beneficial to the development of this industry as a whole.

Nano Labs prefers a long-term holding of  Bitcoin. "We don't make short-term investments because I am optimistic about the long-term value of Bitcoin." Jack Kong said, "Compared to gold, Bitcoin aggregates the world's network effects and liquidity, and also has technological attributes. In the past, gold was the value anchor of the world, because in the era of the industrial revolution, people needed such an equivalent worldwide. But with the advent of the information age, gold is becoming less and less applicable. In the future, with the advent of the digital age and the era of artificial intelligence. We need a new value anchor, and at present, only Bitcoin is the most suitable. However, Bitcoin and gold are not sub-stitution relationship, but an embodied value in another dimension."

Currently, the cryptocurrency market is welcoming a new round of growth. "There were many challenges in the past, including disapproval from the government, regulators and banks, etc., but with victory of Trump in American presidential election, the whole world has become more and more friendly to the industry."Jack  Kong said, "At present, we are facing more cognitive challenges rather than external challenges."

In the future, as governments around the world gradually improve their regulatory frameworks for virtual assets, the compliance path for listed companies to reserve Bitcoin will become clearer.