Collins J. Okoth
Solidion Technology has announced a corporate treasury strategy involving buying Bitcoin using excess cash reserves. The company said in a press release that Bitcoin is a strategic asset and, therefore, a long-term store of value.
Institutional adoption of Bitcoin has grown significantly in recent times. US-based advanced battery materials provider Solidion Technology has announced the inclusion of Bitcoin in its corporate treasury. The company released a press release highlighting its plan to begin accumulating digital assets in its reserves to hedge against rising inflation.
The company’s decision to commence buying Bitcoin comes during interesting times when the asset has been in the spotlight following the victory of a pro-crypto administration that publicly endorsed the crypto industry.
Solidion will commit 60% of its excess cash reserves to Bitcoin
According to the company’s press release, Solidion Technology intends to commit 60% of its excess cash reserves from operations to buy Bitcoin. The company also announced that it will convert its interest earnings from other investment vehicles, such as money market accounts, to Bitcoin. Solidion will commit future capital raises to acquire additional Bitcoin that will be held for the long run.
Solidion’s Bitcoin adoption strategy aligns with its intended objective to enhance shareholders’ value by capitalizing on the asset’s long-term performance. The press release also noted how institutional investors, global wealth managers, governments, corporations, and private individuals continue to adopt blockchain technology exponentially.
The company also noted several of Bitcoin’s advantages, which include its scarcity, digital nature, decentralized, transparent, and bare global liquidity characteristics, unlike any other asset.
Vlad Prantsevich, the Chief Financial Officer of Solidion Technology, commented on the company’s adoption of the Bitcoin strategy, noting that the company believes in Bitcoin’s potential in the financial ecosystem.
The official also mentioned that the company has witnessed major steps institutions have taken regarding Bitcoin adoption while referencing the U.S. SEC’s decision to approve Bitcoin exchange-traded funds earlier this year.
“We believe strongly in Bitcoin’s transformative potential for the financial system, and we see our allocation as both a secure store of value and compelling investment.”
Vlad Prantsevich
Prantsevich highlighted that the company sees the technology making its way into sovereign nations, likely referring to the U.S.’s imminent adoption of Bitcoin as a national reserve asset. The official said the company completed its first purchase and would continue to buy more with time.
Solidon mimics Microstrategy’s move to adopt Bitcoin as a strategic reserve
Solidion’s approach mimics that of software-providing giant provider Microstrategy. The software company made a similar announcement of adopting Bitcoin as a strategic reserve asset on August 11, 2020. Microstrategy made its first Bitcoin purchase on that day worth $250 million for 21,454 Bitcoin.
Today, the firm holds the largest corporate Bitcoin holdings of 279,420 Bitcoin worth $25.09 billion at Bitcoin’s current prices. Microstrategy’s Bitcoin stash has an average purchase price of $11.9 billion, implying that the company has a BTC yield of $14 billion.
Microstrategy announced its recent Bitcoin purchase through a press release dated November 11th. According to the publication, the company purchased 27,200 bitcoins for $2.03 billion at an average price of $74,463. The press release also detailed that the company reported its YTD BTC gain of 26.4%.
