Japanese listed company Remixpoint purchased $5.27 million in cryptocurrency assets and sold its exchange to SBI after being hacked
Remixpoint's main business is energy and automotive, and it previously operated the exchange Bitpoint. An increasing number of listed companies view investing in Bitcoin as a strategic means to enhance profits.Author: Weilin, PANews
Japanese listed company Remixpoint officially disclosed the details of its latest round of cryptocurrency investments on September 27, totaling 750 million yen (approximately 5.27 million USD), acquiring crypto assets including 64.4 BTC (600 million yen), 130.1 ETH (50 million yen), 2,260.5 SOL (50 million yen), and 12,269.9 AVAX (50 million yen). This is the first execution of its "1.5 billion yen (approximately 10.55 million USD) virtual currency purchase plan," and following the announcement, Remixpoint's stock price significantly rose.
Before Remixpoint, in June of this year, another Japanese listed company Metaplanet quickly boosted market sentiment after transforming its hotel business to invest in Bitcoin, with its stock price experiencing a strong increase of up to 360% within two months after a long period of stagnation.
In May of this year, the U.S. listed medical company Semler Scientific also announced the adoption of a Bitcoin asset reserve strategy, and more and more listed companies are viewing investment in Bitcoin as a strategic means to enhance returns.
Main businesses are energy and automotive, previously operated the exchange Bitpoint
Remixpoint was established in 2004, initially founded in Nishiazabu, Minato, Tokyo, for the development of commercial application software. Two years later, Remixpoint was listed on the Tokyo Stock Exchange. In December 2013, the company launched its energy-saving consulting business, and in October 2014, it began its electricity trading business, later expanding into used car trading.
In 2016, Remixpoint established BITPoint Co., Ltd. (now BITPoint Japan Co., Ltd.), focusing on virtual currency exchange services, and registered as a virtual currency exchange operator in 2017. Bitpoint Japan was one of the 18 exchanges approved by the Financial Services Agency (FSA) of Japan. During this period, the company also engaged in tourism and hotel businesses.
However, on the evening of July 11, 2019, Bitpoint Japan unfortunately suffered a hack that resulted in the theft of crypto assets, with estimated losses around 3.5 billion yen. This incident led Bitpoint Japan to completely suspend all services, including trading, payments, and opening new accounts, on July 12.
This asset theft incident dealt a significant blow to Remixpoint. Three years later, partly due to the negative impact of this incident, in July 2022, Remixpoint transferred 51% of its shares in BITPoint Japan Co., Ltd. to a group company of Japanese financial firm SBI Holdings, and the following year transferred all remaining shares of BITPoint Japan Co., Ltd.
The financial report for the second quarter of this year shows that this once-glorious company is facing a difficult situation. For the three months ending June 30, 2024 (April 1, 2024 - June 30, 2024), Remixpoint's net sales increased by 0.1% year-on-year to 4.307 billion yen; however, operating profit decreased by 77.7% year-on-year to 53 million yen, and ordinary profit decreased by 80.7% year-on-year to 41 million yen.
Stock price rises sharply, plans to acquire about 5 million USD in crypto assets
At a board meeting held on September 26, Remixpoint's decision-makers unanimously approved allocating part of its surplus funds to virtual currencies to diversify asset portfolio risks and reduce yen exposure, while hoping to enhance the company's financial resilience through this move. The company clarified its investment and management strategy, with Bitcoin accounting for the majority share (1.2 billion yen) out of the total of 1.5 billion yen (approximately 10.55 million USD), and investing 100 million yen each in Ethereum, Solana, and Avalanche. These investments will be made in phases, with the goal of completion by the end of this year.
Remixpoint stated that the initial skepticism towards crypto assets is no longer mainstream, as the presence of crypto assets as digital currencies is increasing globally. The U.S. policy interest rate hikes and the bankruptcy of the world's largest crypto exchange, FTX, had previously caused a temporary downturn in the crypto asset market. However, since the U.S. Securities and Exchange Commission (SEC) approved Bitcoin spot ETFs in January of this year, the Hong Kong Stock Exchange and the Australian Securities Exchange have also begun trading Bitcoin spot ETFs. Additionally, the emergence of Ethereum spot ETFs has made it easier for more investors to invest in crypto assets, and the market environment is gradually improving.
On the other hand, there may be a future depreciation of the yen. Based on this situation, the company decided to invest and hold crypto assets like Bitcoin as part of its cash management strategy to diversify the value fluctuation risks of held currencies and reduce yen exposure, thereby building its investment portfolio.
In this context, Remixpoint will choose to have the investment and management departments undertake related businesses, clarifying their responsibilities, but will not engage in leveraged trading and may delay the purchase of crypto assets based on market conditions. Furthermore, the management department, independent of the operational department, will conduct monitoring of operational status and other risk management. The trading of crypto assets will be conducted through accounts opened at major crypto asset exchanges. In its purchase plan, Remixpoint will conduct quarterly fair value assessments of its crypto asset holdings and include the gains and losses from these assessments in its profit and loss statement. If there is a significant impact on consolidated performance in the future, timely disclosures will be made.
On September 26, buoyed by the news of the crypto asset acquisition, Remixpoint's stock price rose significantly from 161 yen to 183 yen, before slightly retreating.
Is "speculating on coins" becoming a new "business model" for listed companies?
In June of this year, another Japanese listed company, Metaplanet, quickly boosted market sentiment after transforming to invest in Bitcoin, with its stock price experiencing a strong increase of up to 360% within two months after a long period of stagnation. This trend is similar to the rise in stock price of U.S. listed company MicroStrategy after its investment in Bitcoin.
On September 20, Michael Saylor, the founder of MicroStrategy, the "pioneer" of listed companies investing in Bitcoin, posted on the X platform that MicroStrategy acquired 7,420 BTC at an average price of 61,750 USD, worth approximately 458.2 million USD, achieving a 5.1% BTC yield for the quarter to date and a 17.8% BTC yield year-to-date. As of September 19, 2024, MicroStrategy holds 252,220 BTC, valued at approximately 9.9 billion USD, with an average cost of about 39,266 USD per Bitcoin.
Recently, Mark Palmer, an analyst at investment bank and research firm Benchmark, stated that recent support for the development of the cryptocurrency sector may encourage MicroStrategy to start generating income by lending out some of its Bitcoin holdings. The SEC has granted a conditional exemption to the New York Mellon Bank from the SAB 121 guideline, which requires entities that choose to custody crypto assets to list them on their balance sheets and create corresponding liabilities equal to the value of the cryptocurrencies. Recently, New York Mellon Bank, the largest custodian in the U.S., received permission for cryptocurrency custody.
Palmer indicated that if the SEC's lenient stance on digital assets and the growing institutional interest extend beyond financial institutions like New York Mellon Bank to corporations, MicroStrategy may soon be able to engage with large institutional counterparties to lend Bitcoin and have greater confidence in repaying loans while increasing returns.
Now, with Remixpoint's bold investment in crypto assets, market attention towards it has significantly increased. Although its main business faces challenges, the company is seeking new growth points through a diversified investment strategy. This move not only reflects the flexibility of Japanese companies in responding to market fluctuations but also indicates that an increasing number of listed companies may incorporate cryptocurrencies into their financial strategies. In the future, whether Remixpoint can achieve a performance rebound through this transformation is worth our continued attention.
