Bitcoin Takes a Corporate Step in Indonesia with $100 Million Treasury Transition
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Shares of DigiAsia Corp, an Indonesian fintech company, surged dramatically on May 19 following its announcement to prioritize Bitcoin in its future endeavors.
The organization intends to raise $100 million to establish a BTC reserve, asserting that half of its net income will be allocated for additional acquisitions of Bitcoin. This declaration attracted considerable attention, perhaps excessively rapid.
Stock Rises Amid Bitcoin Reserve Strategy
DigiAsia’s stock, trading under the ticker FAAS on Nasdaq, rose by over 91% to 36 cents by the end of the trading day, as per data from Google Finance. However, this initial enthusiasm was short-lived.
After market hours, the stock plummeted by 20% to 28 cents, indicating how quickly investor sentiments can change, particularly in the crypto realm.
Source: Google Finance
Prior to this announcement, the stock had decreased by roughly 50% throughout the year, and it was trading near $12 back in March 2024. The recent spike appears to be a temporary boost rather than a sustainable recovery.
Bitcoin Strategy and Profit Commitment
DigiAsia is not merely discussing Bitcoin issues but integrating it into its profit strategy. The board has already ratified a plan to classify Bitcoin as a treasury reserve asset, indicating the intention to hold BTC as part of its financial reserves.
Furthermore, the company plans to invest up to 50% of its net income in Bitcoin procurement. It is actively seeking to raise up to $100 million to set these plans in motion, potentially utilizing instruments like convertible notes or crypto financial products.
DigiAsia’s management is in discussions with regulated partners to develop strategies for earning yields on its Bitcoin holdings, exploring options such as lending or staking.
Revenue is Growing but Remains Modest
According to an update from April 1, DigiAsia reported $101 million in revenue for 2024, which represents a 36% increase from the prior year.
The company aims for $125 million in revenue for 2025, with anticipated earnings before interest and taxes of $12 million. While this marks solid growth, DigiAsia remains much smaller compared to other companies actively investing in Bitcoin.
Related Insights
Some investors are questioning whether DigiAsia can compete with established firms like Strategy and GameStop, which raised $1.5 billion earlier this year. While DigiAsia shows ambition, its figures reveal certain limitations.
Increasing Bitcoin Adoption by Public Companies
A growing number of companies are investing in Bitcoin, which is currently priced around $105,116 with a market capitalization nearing $2 trillion, as part of a long-term investment strategy.
MicroStrategy (now known as Strategy) holds over 576,000 BTC, equivalent to roughly $60.9 billion. Strive Asset Management has also declared a shift towards a Bitcoin treasury model.
Image sourced from Unsplash, chart provided by TradingView
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