Bitcoin Updates Today: Bitcoin-Backed Borrowing: Companies Reduce Debts Yet Confront Unpredictable Price Swings
- Sequans Communications sold 970 BTC ($94.5M) to cut debt, reducing liabilities by 50% and lowering its debt-to-NAV ratio to 39%. - Hong Kong firms like Meitu are increasingly using Bitcoin as a strategic reserve amid relaxed crypto regulations and global competition. - Despite the sale, Sequans' stock fell 82% YTD, highlighting market skepticism toward Bitcoin-focused equities amid price volatility. - The move underscores risks of Bitcoin treasury strategies, with Sequans' $2.4B market cap trading below
Hong Kong-headquartered chipmaker
This transaction reflects a broader movement among listed companies to utilize Bitcoin reserves for liquidity and debt reduction. For instance, Hong Kong-listed Meitu Corporation recently boosted its Bitcoin stash to 35.6 BTC with a $5.24 million acquisition, indicating sustained corporate interest in digital assets as strategic reserves, according to Lookonchain. Analysts observe that companies holding Bitcoin are increasingly balancing immediate financial needs with long-term exposure to this volatile asset class.
At the same time, Hong Kong is actively establishing itself as a leading center for digital asset innovation, easing crypto rules to draw in global capital and participants, according to
Sequans’ debt paydown comes amid heightened market volatility, with Bitcoin’s price falling 3.5% in the past day to $103,000, as per
This development also highlights the inherent risks of using Bitcoin as a treasury asset. Although Sequans’ remaining Bitcoin provides some protection against price swings, its $2.4 billion market cap now trades below its $240 million Bitcoin NAV, as noted by Coinotag. Similar trends are being seen at other companies, with some investors questioning whether valuing firms by their crypto holdings is sustainable.
As Hong Kong continues to adjust its regulatory landscape, the
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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