Vanadi Coffee’s shareholders approved its Bitcoin accumulation plan, opening with a $6.8 million purchase of 54 BTC. It plans to invest $1.17 billion in total, which would make it Spain’s largest Bitcoin holder.
So far, Vanadi’s plan seems to be working, with impressive stock price gains in the last few days. However, economists warn of a corporate Bitcoin bubble that the firm might not be able to withstand.
Vanadi Commits to Bitcoin
Companies around the world are turning to the Bitcoin treasury strategy, following in MicroStrategy’s footsteps to make radical business pivots.
Earlier this month, Vanadi Coffee did the same, proposing to spend over $1 billion on Bitcoin to replace a flailing core business. At a board meeting yesterday, shareholders unanimously approved the proposal:
Since then, things have been moving quite fast. Vanadi has already purchased a significant quantity of Bitcoin, further showing its commitment to carrying out the plan.
Its stock valuation rose around 20% today, building on several days of momentum. Hype built as the board meeting approached, continuing throughout its affirmative decision and these early purchases.
Vanadi Coffee Price Performance. Source: Google Finance
At first glance, this strategy is paying off immediate dividends. If Vanadi manages to spend $1.17 on BTC acquisitions, it’ll become the biggest Bitcoin holder in Spain.
Last year, the firm lost $3.7 million, raising questions about its sustainability in the coffee business. Using its resources for a Web3 pivot could be its best chance of survival.
Still, this might not be a sound investment, at least at scale. Now that so many companies are buying Bitcoin, economists worry about an impending bubble.
If major holders liquidate their holdings, it could send a cascade of volatility through the global markets. Since Vanadi’s core business is underwater, it’s issuing debt to buy Bitcoin, making this the core focus.
MicroStrategy, the “industry leader” for corporate Bitcoin holdings, already holds billions in unrealized losses. Rumors of a forced liquidation have dogged the company, but Michael Saylor has kept fresh investment flowing.
Not everyone can manage this feat. If Vanadi gets squeezed by crypto volatility, a few Bitcoin liquidations could spin out of control.
All that is to say, there are a lot of mixed signals in the market. Vanadi is committing hard to Bitcoin, and it’s already reaping significant rewards.
