SpaceX on Friday made a stellar debut on public markets, drawing intense investor interest and becoming one of the most valuable listed companies in the world. The company is now worth $2.1 trillion after its stock launched 19.2% higher in its debut on Wall Street.
The IPO attracted strong demand from both retail and institutional investors as Elon Musk pushes ahead with plans to expand artificial intelligence infrastructure into space through orbital data centres. But, what might have missed the eye is that the listing brings the largest bitcoin position ever attached to an IPO, with SpaceX disclosing a bitcoin reserve worth approximately $1.29 billion. Though it is not significant compared to the company’s total valuation, it could influence how corporate world views and adopts cryptocurrency.
According to the company’s S-1 filing, SpaceX owns 18,712 bitcoins. The company has bought them for around $661 million, and their value had risen to about $1.29 billion as of March 31.
The company filing mentioned tha it holds bitcoin ‘as a strategic reserve for excess cash.’
Why this is significant?
SpaceX is not a bitcoin company, but primarily a rocket, satellite, and AI company. Yet, it it has chosen to keep bitcoin as part of its corporate reserves alongside cash and it decided to carry on the strategy while nto the public market through its historic Nasdaq listing.
This is what makes it different from other major publicly traded bitcoin holders.
For example, Strategy’s, the largest corporate holder, core strategy revolves around buying and holding bitcoin, and its stock often moves in line with the cryptocurrency’s price. Then, treasury vehicles like BitMine raise funds specifically to purchase crypto assets, making their fortunes heavily dependent on the value of those holdings.
On the other hand, SpaceX treats bitcoin as one part of a broader business and treasury strategy rather than its primary purpose.
SpaceX now ranks as the eighth-largest corporate holder of bitcoin, according to cryptocurrency treasury tracking platforms
SpaceX crypto strategy – how it can change Bitcoin trading pattern in coming day?
For SpaceX, the bitcoin holding is relatively small compared to company’s total valuation. Such a holding cannot significantly influence the stock prices, but it is substantial enough to normalise the fact that it can be accepted corporate asset.
For years, blockchain analysts believed SpaceX owned around 8,300 bitcoins, but now the company’s IPO filing revealed it actually held 18,712 bitcoins. Although SpaceX had increased its bitcoin holdings over the years, the full extent of its investment remained unknown until the company filing was released. And, now that SpaceX is a public company, it will have to regularly report its bitcoin holdings.
Under fair-value accounting rules, SpaceX will have to update the value of its bitcoin holdings every quarter based on market prices. As a result, the company will report gains when bitcoin rises and losses when it falls, even if it does not buy or sell any bitcoin.
Also, another striking strategy the company follows is the fact the neither SpaceX and Tesla, Elon Musk’s two major corporate ventures, have shown much interest in actively trading its bitcoin reserves. Instead, they have continued to hold the asset through multiple earnings cycles, market downturns, analyst scrutiny, and price volatility.
This provides Fortune 500 finance chief a working example on they can can treat bitcoin as a long-term reserve asset, absorb the resulting earnings volatility, and continue operating without making the cryptocurrency a central focus of its financial strategy.
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