- SOS Limited invested $50 million in Bitcoin, using trading and arbitrage strategies to maximize returns.
- MicroStrategy faced significant market cap loss despite holding over $16 billion in Bitcoin.
Chinese data mining company SOS Limited has announced a significant move into the cryptocurrency market with a $50 million investment in Bitcoin [BTC].
The decision was revealed on the 27th of November through an official press release, reflecting the firm’s strategic push to diversify its portfolio.
China’s Bitcoin strategy
For those unaware, SOS plans to leverage various trading methodologies, including quantitative trading, direct investments, and arbitrage strategies, to maximize returns from this investment.
This move made by the company, which runs a Bitcoin mining facility in Wisconsin, is regarding,
“long-term belief in Bitcoin’s role as a store of value and a strategic asset.”
Remarking on the same, SOS chairman and CEO Yandai Wang said in a statement,
“Bitcoin market performance is robust and supported by positive developments such as the launch of several Bitcoin-related ETF options and ongoing improvements in the US regulatory environment for digital assets,” SOS chairman and CEO Yandai Wang said in a statement.”
Impact on SOS Limited stock price
Following this, SOS Limited saw a significant surge in its stock price, closing nearly 43% higher at $9.93 on the 27th of November, with an additional 14.5% increase in after-hours trading, reaching $11.36.
This spike follows a period of BTC’s recovery after a brief dip below $91,000, its lowest point in a week.
As the largest cryptocurrency rebounded to $96,000, SOS Limited’s announcement of a $50 million BTC investment came at a time when investor enthusiasm for digital assets is growing.
Needless to say, the recent Bitcoin rally has spurred heightened participation from global investors, further fueling SOS Limited’s stock gains.
This shows that the company believes that BTC has the potential to play a crucial role in global reserve strategies.
Hence, Yandai Wang, Chairman and CEO of SOS, pictured it best when he said,
“We believe this investment plan will further enhance the Company’s overall competitiveness and profitability in the digital asset investment sector,”
Bitcoin’s impact on other crypto-related firms
In recent months, publicly traded companies have significantly increased their Bitcoin acquisitions.
Just earlier this week, MicroStrategy made another substantial BTC purchase, totaling $5.4 billion.
However, despite MicroStrategy’s impressive Bitcoin acquisitions, the company is currently grappling with its most significant market valuation decline.
For those unaware, having amassed over $16 billion in BTC this year, it remains the largest Bitcoin holder in the industry.
However, the recent drop in BTC’s price has resulted in a dramatic 35% decrease in MicroStrategy’s market cap, erasing more than $30 billion.
On the 26th of November, the company’s stock took a further hit, falling 12% as BTC’s price dipped below $92K, highlighting the volatility and risks that come with heavy reliance on digital assets.
