Yet another publicly traded company has adopted Bitcoin as its “primary treasury reserve asset,” signaling a growing trend among small-cap firms aiming to kickstart their growth.
Semler Scientific, a medical device maker that trades on the NASDAQ under the SMLR ticker, announced on Tuesday that it had purchased 581 BTC for $40 million, fees and expenses included.
"Our Bitcoin treasury strategy and purchase of Bitcoin underscore our belief that Bitcoin is a reliable store of value and a compelling investment," said Chairman Eric Semler, in an accompanying statement. “We believe that Bitcoin has the potential to generate outsize returns as it gains increasing acceptance as digital gold.”
Immediately following the announcement, SMLR stock surged 33% to $31.08 apiece, kicking off a strong recovery following nonstop losses since its $51 yearly high in February. According to Yahoo Finance, the company’s total market cap is now $216 million.
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It’s a promising trend among firms that make the Bitcoin leap: Since MicroStrategy (MSTR)–now the world’s largest corporate Bitcoin holder with $14.5 billion worth of BTC–announced its first Bitcoin purchase in 2020, the company’s stock has surged in value by over 1,000%.
Likewise, the Japanese real-estate-turned-Bitcoin firm Metaplanet has nearly tripled in value since announcing its Bitcoin strategy less than two months ago. On Tuesday, Metaplanet announced that it would purchase another 250 million yen ($1.6 million) worth of BTC.
Not all such announcements are legitimate, however. In late March, an obscure holding company called Nilam Resources (NILA) rallied 1000% after promising an incoming $1.72 billion Bitcoin purchase—before going radio silent on investors and plummeting to zero one day later.
Like its predecessors, Semler praised Bitcoin as a “scarce and finite” asset that could serve as a “reasonable” safe haven and store of value asset superior to gold.
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Notably, $SMLR states the approval of the #bitcoin#ETF played a role in the company's decision, as this validated the future #institutional adoption likely
"Furthermore, we are energized by the growing global acceptance and 'institutionalization' of bitcoin -- reflected most… https://t.co/6LSdC8Kr8k
— Thomas (Tom) Lee (not drummer) FSInsight.com (@fundstrat) May 28, 2024
Furthermore, after witnessing the “institutionalization” of Bitcoin through its highly successful spot ETFs launched in January, the company concluded that BTC would be the most productive place to invest excess cash from its medical product business.
“Bitcoin will serve as Semler Scientific's principal treasury holding on an ongoing basis, subject to market conditions and the anticipated cash needs of Semler Scientific,” the company wrote.
Semler did not immediately respond to Decrypt’s request for comment.
