Can you explain what a "Bitcoin Treasury Company" is?
It's a concept initially developed by MicroStrategy in the United States and by a company in Japan called Metaplanet. Several companies are already buying Bitcoin, but only these two have really structured a "Bitcoin Treasury Company" strategy, the aim of which is to increase the number of Bitcoins per share.
During their latest earnings call, MicroStrategy boss Michael Saylor, explained that their strategy was to buy Bitcoin, place it on their balance sheet, and thus increase their volumes. This also enables them to obtain more favourable financing terms. In short, they buy Bitcoin, add it to their financial balance sheet, which increases volumes and ultimately makes them eligible for better financing terms.
When you talk about volumes, you're referring to what type of volume exactly?
Volumes can refer to the number of investors in the company, the amount of investment, or even the options market that is developing around their strategy. All of this leads to better financing conditions, more Bitcoin to buy, more volatility and more volumes on their balance sheet.
In contrast to other markets, where volatility is often frowned upon, in this case it is viewed positively because Bitcoin is a stable long-term asset. By generating more volatility, the company benefits from better financing and can pursue its accumulation strategy.
So, to sum up, the strategy is to accumulate Bitcoin indefinitely and with no intention of selling?
Exactly. The strategy is simple: accumulate Bitcoin, hold it indefinitely and use the capital markets to finance these acquisitions.
Can you give us more details on the financing methods, including convertible debt?
In the case of MicroStrategy, for example, their convertible debt has enabled the holders of the debt to achieve higher returns than Bitcoin, because these are not traditional debt instruments. They can achieve returns of +30%, or even +70% in some cases, due to the long-term, lower-risk nature of this debt.
These companies are based on an accumulation strategy supported by their operational activity. In the case of The Blockchain Group, our operational activity includes businesses dedicated to artificial intelligence, data intelligence and also blockchain via our Iorga and Trimane entities. A solid operating base is essential, as it can generate cash flow to support this long-term strategy.
Did the implementation of this strategy raise any questions or objections from shareholders?
On this point, I can't give too many details, but what I can say is already mentioned in our press release.
We announced the raising of €1 million with a subscription price of €0.20, offering a 70% premium to the share price. This clearly shows that there has been strong interest in our strategy. We also specified in the press release that the company reserves the right to carry out other similar transactions.
How has MicroStrategy's strategy inspired you? Are you looking to replicate their model?
Yes, in some respects, but there are differences. It's important to distinguish between a company's balance sheet and its profit and loss account. Here, we're really focused on the balance sheet. Today, Bitcoin is the best reserve asset available thanks to its unique properties.
Other companies like Metaplanet have adopted a similar strategy, although they remain smaller in size than MicroStrategy. What is interesting about companies like MicroStrategy or Metaplanet is that investors are starting to value the shares of these companies with higher multiples compared to the value of their bitcoins on balance sheet, as they see this strategy as a growth model.
What's the benefit to an investor of buying shares in The Blockchain Group rather than owning Bitcoin directly?
There are several ways to acquire Bitcoin.
An individual investor can buy it directly on an exchange platform, but this involves managing security (custody), and the risks associated with keeping private keys.
For institutional investors, there are ETPs (Exchange Traded Products), but they include management fees. By investing in a company like ours, investors get a form of indirect exposure to Bitcoin through a traditional share. This means they don't have to manage custody risks directly, and they can potentially benefit from a valuation multiple. What's more, they can access shares via traditional accounts such as the PEA in France.
Why do you consider Bitcoin to be the "asset of the century"?
Bitcoin has seen the strongest growth of any global asset over the last fourteen years. It is the only asset in the world to offer verifiable and immutable scarcity, with a maximum of 21 million units.
Unlike gold, whose scarcity is not absolute, Bitcoin offers unrivalled decentralisation and security. Its annualised growth rate is around 25% to 50% over four years, and we can envisage a valuation similar to that of gold in the future, with growth prospects that could potentially multiply its value by 10 or even 100 times over the long term.
MicroStrategy recently faced concerns about margin calls. How do you manage this risk?
In fact, MicroStrategy had taken on debt with Silvergate Bank, and this had led to fears of liquidation at a certain Bitcoin price. However, MicroStrategy withdrew this instrument and avoided using Bitcoin as collateral, preferring to opt for long-term financing with no margin calls.
For our part, the fundraising we've done is based on equity, which means we have no collateral or margin call risk, offering greater security.
How do you manage the custody of your Bitcoins?
We've announced that we go through Bank Delubac for custody. The bank also has a partnership with Swiss start-up Taurus , which strengthens the security of our assets.
Do you consider yourself to be the "European MicroStrategy"?
Yes, we are in a way the European MicroStrategy, at least our treasury strategy is directly inspired by it. We are the first company in Europe to adopt a "Bitcoin Treasury Company" strategy, but within a French and European regulatory framework.
Unlike other companies that buy Bitcoin to diversify their assets, our treasury strategy is entirely dedicated to this objective of accumulating Bitcoin over the long term. What sets us apart is our focus on increasing the number of Bitcoin per share over time, which can translate into potential growth in value per share, depending on Bitcoin appreciation.
In addition, we have significant operational activity independent of this cash management strategy.
