Article Author: Ada

On December 5, 2024, Bitcoin broke through $100,000, and the cryptocurrency market erupted in cheers. The prediction made by Kong Jianping, founder of Nano Labs (Nasdaq: NA), about Bitcoin reaching $100,000 years ago was validated on this day.

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

In an interview with MetaEra, Kong Jianping stated that Bitcoin has now entered a new stage. It has transformed from an investment target for retail investors to a reserve asset for some institutions or governments. He believes that the risk of publicly listed companies holding Bitcoin has now reached an acceptable level and can bring good returns for the company. This is also one of the motivations for Nano Labs to announce its Bitcoin investment. "In the future, we will hold Bitcoin for the long term," said Kong Jianping.

Since the beginning of this year, Bitcoin has risen over 140%. Trump's victory in the U.S. presidential election and his friendly attitude towards the cryptocurrency industry have become catalysts for this surge. Behind the immense influence and discussion, the boundaries of Bitcoin are continuously expanding.

An increasing number of publicly listed companies have allocated Bitcoin as a reserve asset, and this trend is spreading from U.S. companies to Chinese listed enterprises. According to incomplete statistics, more than 60 publicly listed companies worldwide currently hold varying amounts of Bitcoin.

As the popularity of Bitcoin continues to rise, discussions around publicly listed companies holding Bitcoin are also increasing. What are the motivations for publicly listed companies to hold Bitcoin? How should publicly listed companies respond to the risks brought by Bitcoin's volatility? What kind of holding strategy should publicly listed companies adopt?

Publicly Listed Companies Compete to Buy Bitcoin

In this global "coin hoarding wave," U.S. publicly listed company MicroStrategy is undoubtedly the pioneer of this trend.

As early as 2020, its founder Michael Saylor announced that Bitcoin would be part of the company's assets. At that time, it marked the beginning of MicroStrategy's "Bitcoin strategy."

The "Bitcoin strategy" has brought MicroStrategy both stock and cryptocurrency gains. To date, its stock price has increased by as much as 3000%, and its market capitalization once exceeded $100 billion. With Bitcoin breaking through $100,000, MicroStrategy's total return on Bitcoin has also reached 63.3% since the beginning of the year.

Stimulated by enormous economic benefits, several U.S. publicly listed companies have begun to emulate MicroStrategy's Bitcoin strategy, treating Bitcoin as a reserve asset.

According to Bitcoin Treasuries data, since November, fitness equipment manufacturer Interactive Strength announced a $5 million investment to purchase Bitcoin; AI company Genius Group spent $14 million to buy 153 Bitcoins; medical company Semler Scientific approved an investment plan for 1,570 Bitcoins. Additionally, several companies such as Rumble, Anixa Biosciences, and LQR House have joined the ranks of Bitcoin investors.

In addition to spending on Bitcoin purchases, e-commerce platform LQR House Inc. (LQR) has also started accepting cryptocurrency payments on CWSpirits.com, allowing customers to flexibly use digital currencies to purchase alcoholic beverages. As part of this plan, LQR House has adopted a policy to retain up to $10 million in cryptocurrency payments as Bitcoin.

The Bitcoin investment trend quickly spread to Chinese listed companies.

In addition to Nano Labs mentioned earlier, Chinese concept stock SOS Ltd has also laid out plans for Bitcoin. It announced a $50 million investment to purchase Bitcoin. Other Chinese listed companies such as Boyaa Interactive, Coolpad Group, Guofu Innovation, and NetDragon have also joined the Bitcoin investment ranks.

Notably, Hong Kong-listed company Boyaa Interactive converted its reserves of Ethereum worth $49.48 million into Bitcoin between November 19 and November 28, ultimately acquiring 515 Bitcoins. This decision increased its Bitcoin holdings to 3,183, surpassing the previous largest Bitcoin holder in Asia, the Japanese listed company Metaplanet, earning it the title of Asia's "MicroStrategy."

According to the latest news from MetaEra, as of December 12, 2024, Nano Labs has accumulated approximately 360 Bitcoins, with a total value of about $36 million at current prices. According to Coingecko data on December 12, this holding ranks 21st among publicly listed companies in terms of Bitcoin holdings.

According to Kong Jianping's observations, publicly listed companies holding Bitcoin can be divided into three categories: first, native cryptocurrency companies or those engaged in Web3 projects with cryptocurrency-related business in their main sectors; second, enterprises in the Crypto Miner ecosystem that tend to hold Bitcoin long-term, such as Canaan and The9; third, some technology, gaming, or internet companies that cross over to hold Bitcoin as part of their asset portfolio, such as Boyaa Interactive and Meitu.

Kong Jianping believes that publicly listed companies holding Bitcoin will be a long-term trend. Regarding holding strategies, he stated that Bitcoin should be allocated and held without affecting the company's cash flow. "This way, the short-term volatility of Bitcoin will not have a substantial impact on the company's operations," said Kong Jianping.

At the same time, Nano Labs' strategic reserve of Bitcoin has also gained recognition. Recently, Nano Labs announced a private placement plan, raising a total of $36.25 million, with participation from Fenbushi Inc - US, Longling Capital, Golden Forest Management Limited, and others.

To Hold Long-Term or Not?

On the evening of December 4, Meitu announced on the Hong Kong Stock Exchange that it had sold all its cryptocurrencies, including approximately 31,000 Ether and 940 Bitcoins, realizing a profit of about $79.63 million (equivalent to approximately 571 million RMB).

Meitu's first purchase of cryptocurrencies was in March 2021, and over the past three years, its investment return rate in cryptocurrencies has been about 44%. Although Meitu has made substantial profits from its investments, it has also attracted considerable controversy.

According to reports from The Paper, many netizens hold a negative attitude towards Meitu's purchase of digital currencies. Some analysts believe that Meitu's short-term behavior is "not focused on its main business" and has the suspicion of speculation.

In Kong Jianping's view, the allocation of Bitcoin by publicly listed companies, whether for short-term speculation or long-term allocation, indicates that there are hot topics in the market, and essentially contributes to the promotion of Bitcoin and the Web3 sector, which is overall beneficial for the development of this sector.

Nano Labs tends to hold Bitcoin for the long term. "We do not engage in short-term investments because I am optimistic about Bitcoin's long-term value," said Kong Jianping. "Compared to gold, Bitcoin aggregates the network effects and liquidity of the entire world, while also having technological attributes. In the past, gold was the world's value anchor because during the Industrial Revolution, there was a need for such an equivalent globally. However, with the advent of the information age, gold has become increasingly unsuitable. In the future, with the arrival of the digital age and the era of artificial intelligence, we need a new value anchor, and currently, Bitcoin is the most suitable. However, Bitcoin and gold are not in a substitute relationship; rather, they represent value in different dimensions of an era."

Currently, the cryptocurrency market is welcoming a new round of growth. "There were many challenges in the past, including non-recognition from governments, regulatory agencies, and banks, but with Trump's rise to power, the entire world has become increasingly friendly towards this sector," said Kong Jianping. "At present, the challenges we face are more about cognition rather than external challenges."

In the future, as the regulatory frameworks for virtual assets by various governments gradually improve, the compliance path for publicly listed companies holding Bitcoin will also become clearer.