The Norway-based crypto exchange Norwegian Block Exchange has seen its stock price jump over 138% in a single day after it said it was starting to buy and hold Bitcoin.
The company said on June 2 it purchased 6 Bitcoin (BTC), worth $633,700 at current prices, with plans to expand its holdings to 10 BTC by the end of the month.
It added that it’s continuing discussions to raise further capital for more Bitcoin buys.
Shares in Norwegian Block Exchange (NBX) stock rose over 138.5% over the June 2 trading day, closing at 0.033 euros ($0.038), according to Google Finance. So far, the stock’s all-time high has been 0.93 euros ($1.06), which it hit in January 2022.
Norwegian Block Exchange’s newly acquired Bitcoin will be used as collateral to issue USDM, a stablecoin on the Cardano blockchain, and generate yield on the Bitcoin and within the Cardano ecosystem.
The platform said that “Bitcoin is becoming an important part of the global financial infrastructure,” and it will use its new holdings to “increase operational efficiency” and attract capital from companies interested in crypto.
The exchange said it will explore offering Bitcoin-backed loans as part of the board’s agenda to become a digital asset bank.
More Norwegian firms add Bitcoin
At least one other Norwegian company has also added Bitcoin to its balance sheet. In 2021, Aker ASA, a Norwegian industrial holding company, created a subsidiary, Seetee, dedicated to investing in Bitcoin and holding liquid assets in crypto.
Through the subsidiary, Aker holds 1,170 Bitcoin, according to Bitcointreasuries.net, bought at an average cost of $50,200 and worth $123 million at current prices.
Norwegian crypto brokerage firm K33 has also flagged plans to join the growing number of other public companies buying up Bitcoin, raising 60 million Swedish krona ($6.2 million) to buy and hold the cryptocurrency.
Norges Bank, Norway’s $1.7 trillion sovereign wealth fund, indirectly owned 3,821 BTC through its stock market investments by the end of 2024 as well.
After announcing a Bitcoin buying plan, other companies have also seen their stock prices gain. Paris-based crypto company Blockchain Group started buying Bitcoin on Nov. 5, and its stock spiked 225% to 0.48 euros ($0.52).
Meanwhile, shares in the Indonesian fintech firm DigiAsia Corp nearly doubled, rising 91%, after the company said it plans to raise $100 million to seed its first of many Bitcoin buys.
Corporate Bitcoin treasuries collectively hold over three million in Bitcoin, worth over $342 billion, according to Bitbo data.
NBX and Bitcoin Treasury: An Analysis
- NBX Stock Surges: Norwegian Block Exchange (NBX) stock jumped 138% following its announcement of a Bitcoin treasury strategy.
- Small Initial Investment: The company initially purchased 6 BTC, with plans to increase to 10 BTC by the end of the month.
- USDM Stablecoin: NBX intends to use the Bitcoin as collateral for its USDM stablecoin on the Cardano blockchain.
- Broader Trend: Other Norwegian and international companies are also adding Bitcoin to their balance sheets.
- Future Plans: NBX is considering offering Bitcoin-backed loans as part of its digital asset bank ambitions.
Why It Matters
NBX’s strategic move highlights a growing trend of companies recognizing Bitcoin as a valuable treasury asset. This isn’t just about short-term gains; it signals a long-term belief in Bitcoin’s potential to enhance operational efficiency and attract capital. The decision to use Bitcoin as collateral for a stablecoin further demonstrates innovative use cases for the cryptocurrency beyond simple holding.
Market Impact
The immediate market reaction – a 138% surge in NBX stock – underscores the positive sentiment surrounding corporate Bitcoin adoption. While the initial Bitcoin purchase is relatively small, the announcement itself acted as a catalyst, attracting investor attention and boosting confidence. This could encourage other companies to explore similar strategies, potentially driving further demand for Bitcoin.
Expert Take & Personal Insight
While the NBX situation is promising, investors should be cautiously optimistic. A 138% jump is significant, but it’s crucial to remember that NBX is a relatively small company. Sustained growth will depend on their ability to successfully execute their Bitcoin treasury strategy and integrate it effectively with their other business operations. Furthermore, the overall market sentiment towards Bitcoin will undoubtedly play a crucial role. However, the move by NBX could be a leading indicator; smaller companies, particularly those in the crypto space, may be more agile and willing to embrace Bitcoin as a treasury asset before larger, more traditional corporations.
Actionable Insight
For traders and investors, this news provides several key takeaways:
- Monitor NBX Performance: Track NBX stock performance in the coming weeks and months to assess the long-term impact of their Bitcoin treasury strategy.
- Watch for Similar Announcements: Keep an eye out for other companies, especially smaller firms in the crypto and fintech sectors, announcing similar Bitcoin treasury plans. This could signal a broader trend.
- Consider Altcoins: NBX’s use of Bitcoin as collateral for a stablecoin on Cardano (ADA) highlights the potential for innovation in the altcoin space. Research and explore projects with strong use cases and development teams.
Conclusion
NBX’s Bitcoin treasury initiative and the subsequent surge in its stock price serve as a compelling case study for the potential benefits of corporate Bitcoin adoption. While challenges remain, this event underscores the growing mainstream acceptance of Bitcoin and its evolving role in the global financial landscape. Moving forward, we can expect more companies to explore similar strategies, driving further innovation and growth in the crypto market.