Tomorrow's Business Today
The bitcoin move – a PR disaster in waiting
How do you give your small, unappreciated stock market listed company a boost?
Easy – just put out a statement that says you are moving into bitcoin.
This year a flurry of companies have entered the Bitcoin treasury field, allowing them or helping others to hold bitcoins and other digital assets.
Smarter Web Company tried this in April, making it suddenly a fintech unicorn.
We must report, with sorrow, it did not last.
Panther Metals, a miner, said last week it had bought one bitcoin. The shares are up 80%.
Some of us have seen this stunt before.
During the dotcom boom any number of boring old businesses decided that they were no longer Cement Incorporated, but had become WeMakeBricks.com.
A while ago, NFT’s (non-fungible tokens) were all the rage. Even former England captain John Terry was in on it.
How’s that going? Not great.
AI and blockchain are also buzzy things for firms to claim they are deeply into. The number of them that claim to have an AI plan bares little relationship to those that actually do.
And what self-respecting widget maker wouldn’t have a blockchain strategy with which to delight shareholders.
The bitcoin manoeuvre is a bit different, a bit riskier, than the others.
Because it allows small investors, who might otherwise find buying cryptocurrency rightly tricky, to become bit-coiners after a few keystrokes.
They just have to fire up the Hargreaves Lansdown account, and away they go.
It means there’s a whole new slate of companies whose fortunes could be more closely aligned with the trading of cryptos than the underlying business.
That in turn means UK investors can have crypto holdings in their ISA or SIPP.
When it goes wrong, it could affect far more people than just those who thought John Terry must know what he was doing in the NFT space.
There is also, I assume, a regulatory risk as a company whose primary activity is treasury management would become a fund manager or an investment trust and need to be governed as such.
I’m sure the FCA is right up to speed here (coughs).
Unless you think bitcoin is going to go up for ever, all of this is a PR nightmare in waiting for someone. Possibly, for lots of you.
Please send candidates for press release of the day to:
Press release of the day
Good, quotable stuff on house prices here from Jonathan Hopper of Garrington Property Finders.
He says: “The post-Stamp Duty lull in demand has collided with a deluge of supply.
“In some areas, the flood of supply seems almost biblical. Estate agents are seeing a wave of new instructions that includes properties re-entering the market that were withdrawn from sale during last year’s uncertainty, as well as the traditional summer surge.
“This is not primarily a market correction prompted by falling demand, but one triggered by an inescapable imbalance: too many sellers, not enough serious buyers.”
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