Hong Kong-listed Company Bets Big on Bitcoin: Boyaa Interactive Holds Over $200 Million in Bitcoin, with over $100 Million in Unrealized Gains

Hong Kong-listed Company Bets Big on Bitcoin: Boyaa Interactive Holds Over $200 Million in Bitcoin, with over $100 Million in Unrealized GainsA Hong Kong-listed company with a market capitalization of approximately $230 million has a Bitcoin holding worth a staggering $226 million. Boyaa Interactive (HK00434) announced on November 12th that as of the announcement date, the company held 2,641 Bitcoins with a total cost of approximately $143 million, with an average cost of $54,000 per coin

Hong Kong-listed Company Bets Big on Bitcoin: Boyaa Interactive Holds Over $200 Million in Bitcoin, with over $100 Million in Unrealized Gains

A Hong Kong-listed company with a market capitalization of approximately $230 million has a Bitcoin holding worth a staggering $226 million. Boyaa Interactive (HK00434) announced on November 12th that as of the announcement date, the company held 2,641 Bitcoins with a total cost of approximately $143 million, with an average cost of $54,000 per coin. It also held 15,400 Ethereum with a total cost of $42.58 million, at an average cost of $2,756 per coin. This signifies that Boyaa Interactive's investment strategy in digital assets is highly aggressive, with its Bitcoin and Ethereum holdings exceeding 125% of its total market capitalization.

Boyaa Interactive is a gaming company established in 2004, specializing in online casual games. It was listed on the Hong Kong Stock Exchange on November 12, 2013. In recent years, Boyaa Interactive has gradually increased its investments in digital assets, viewing them as a crucial step in developing and laying the groundwork for its Web3 business. It considers this investment a part of its asset allocation strategy.

Looking back, Boyaa Interactive began purchasing cryptocurrency and other digital assets in 2023. As of the end of 2023, the company's total digital assets amounted to 78.6 million yuan. By the end of the first half of this year, the company's total digital assets had climbed to approximately 1.688 billion yuan, accounting for a whopping 75% of its total assets and exceeding 90% of its current assets.

Boyaa Interactive's digital asset portfolio primarily consists of Bitcoin, Ethereum, and Tether. As of the end of June, the company held approximately 2,079 Bitcoins at an average cost of $51,300 per coin. In the second quarter alone, the company purchased 885 Bitcoins. Additionally, it holds around 15,300 Ethereum at an average cost of $2,756 per coin.

The significant rise in Boyaa Interactive's net profit in the first half of the year can be attributed to the substantial increase in the fair value of its digital assets. During the reporting period, the company recorded approximately 245.7 million yuan in fair value gains from digital assets, constituting 87% of its net profit attributable to the parent.

As of the close of trading on November 12th, Boyaa Interactive closed at HK$2.52, resulting in a market capitalization of HK$1.79 billion. The recent surge in the digital currency market, with Bitcoin briefly reaching $90,000 and Ethereum exceeding $3,440 on November 12th, translates to unrealized gains exceeding $100 million for Boyaa Interactive's holdings of Bitcoin and Ethereum alone.

It's worth noting that Boyaa Interactive is not the only company in the Hong Kong stock market that has made substantial investments in cryptocurrencies.

In March of this year, Inke (HK03700) announced that its board of directors had approved a $100 million budget to be used for cryptocurrency purchases on any regulated and licensed trading platforms over the next five years.

Guofeng Innovation (HK00290) announced in August that it had purchased a total of HK$36 million worth of Bitcoin (excluding trading costs) from March to August.

BlueFocus Interactive (HK08267) disclosed in its 2024 mid-year earnings report that it holds 142.8539 units of Bitcoin and 848.386 units of Ethereum, with a total cash outlay of approximately $8.8 million.

"Blockchain first stock" Canaan Inc. (NASDAQ: CAN) also holds a substantial amount of Bitcoin. As of June 30th, the company held 1,133.5 Bitcoins, with a total fair value of $69.9 million at that time.

There aren't many A-share companies holding Bitcoin. In August, ZhiDu Technology (SZ000676) stated on an interactive platform that it accounts for Bitcoin as an intangible asset, initially measured at cost; as of December 31st, 2023, the book value of the company's intangible asset digital asset (Bitcoin) was 56.47 million yuan. The company sold some of its Bitcoin in the first quarter of this year. In early November, ZhiDu Technology announced that it still holds Bitcoin.

In December 2013, the People's Bank of China, along with five other ministries and commissions, issued a "Notice on Preventing Bitcoin Risks," stating that Bitcoin is not a currency, cannot be used, and should not be used as a currency in the market. The document also explicitly requires all financial and payment institutions to refrain from engaging in Bitcoin-related businesses.

Within the past week, Bitcoin has repeatedly broken historical highs. On Wednesday of last week, after Trump's re-election victory became apparent, Bitcoin surpassed $75,000 per coin for the first time, marking a historical high. Following the announcement of a 25-basis point rate cut by the Federal Reserve on Thursday of last week, Bitcoin soared in celebration, breaking through the $80,000 mark on Sunday, and reaching a peak of $90,000 on the 12th.

Previously, market funds were heavily buying Bitcoin. On January 10th of this year, the first batch of 11 Bitcoin spot ETFs in the United States was launched, with a combined asset size of around $28 billion. As of yesterday, this size has nearly tripled to $82 billion. iShares Bitcoin Trust (IBIT), managed by BlackRock, is the largest spot ETF fund in the market. After reaching a record high of $4.1 billion in trading volume on Wednesday of last week, it absorbed another $1.1 billion in net inflows the following day, setting a new record for single-day maximum inflows. Recently, IBIT's assets have surpassed those of the SPDR Gold Trust (IAU), partly reflecting the influx of capital into Bitcoin while gold has been comparatively "neglected."

This trend is also evident in price movements. Bitcoin has surged while the price of gold has plummeted. On the day the election results were announced last week, gold prices saw their largest decline in over two years, falling by 3.93% over the past week. Noelle Acheson, a crypto macro analyst, stated that the Trump administration's introduction of clearer cryptocurrency regulations could lead some investors to prefer Bitcoin over gold.

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