Tuesday, 02 January 2024 12:17 GMT

'We Buy One Bitcoin A Day': Why Companies Are Adding BTC To Balance Sheet


(MENAFN- Khaleej Times)

More companies across the world are adding Bitcoin (BTC) to their balance sheets, according to experts. Some shared how their companies are regularly investing in cryptocurrency to reap great rewards.

Danny Yeung, Co-Founder and CEO of health science company, Prenetics shared how the company has been buying one Bitcoin every single day since it was formed.“We buy one BTC every day and we will continue to do so,” he said.“We currently have about 505 Bitcoins and we believe this is way for us to hedge against inflation. It has provided us with significant shareholder value.”

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Speakers at the Bitcoin Mena summit shared how more firms are now becoming Bitcoin treasury companies. Such corporations allocate a significant portion of their reserves to BTC instead of buying just cash, bonds, or stocks.

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According to Eric Benz, the CEO of Bitcoin company Vaultz Capital PLC, the trend comes down to the conviction that BTC is the hardest asset available.“Holding cash on a balance sheet means guaranteed depreciation in real terms,” he told Khaleej Times.“Bitcoin offers asymmetric upside and acts as a hedge against fiat erosion. For a listed company, it also gives shareholders a way to gain BTC exposure through their existing brokerage accounts – no wallets, no exchanges, and no custody headaches.”

He added that early adopters like MicroStrategy set the pace, and more recently companies such as Metaplanet in Japan and Phoenix Group in Abu Dhabi have contributed to that acceleration.

Growing trend

During a panel discussion, Selim Chidiac of Chidiac Investments Limited said he sees the trend growing among businesses that want to protect long-term value.“A Bitcoin treasury company is one that takes a long-term view of its balance sheet,” he said.“These companies reinforce their assets with Bitcoi the same way they might with gold or real estate.”

While public companies face layers of regulation and oversight, private and family-owned businesses are quietly becoming early adopters.“It's far easier for private companies to add Bitcoin,” said Chidiac.“Some family-owned firms that bought BTC a few years ago now find their Bitcoin holdings outweigh their core business.”

He gave the example of US burger chain Steak 'n Shake.“They added Bitcoin to the balance sheet and now they use it as a form of payment,” he said.“The CEO was in Vegas telling us it was faster and cheaper for them to get paid in Bitcoin than in fiat. And that's fantastic, it's just the beginning.”

Innovation in digital credit

Beyond investment, experts also highlighted how Bitcoin can unlock new financial services for companies. According to Shawn Owen of Salt Lending, more businesses could access credit, with new products in the making.“Innovation around digital credit has a lot of potential,” he said.“We're seeing innovation around insurance, custody, credit, and lending."

He further explained that once a company holds BTC, it naturally opens the door to borrowing against Bitcoin, extending credit, and using strategies that the“ultra-wealthy” have always used with traditional assets. He pointed out that the cryptocurrency allows small businesses to do what only banks and rich individuals could do before.

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Khaleej Times

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