Altvest Capital revealed plans to rename itself as Africa Bitcoin Corporation, becoming the first Bitcoin Treasury company on the African continent. This strategic pivot underlines a growing interest in cryptocurrency among traditional financial institutions, showcasing Altvest’s commitment to leveraging digital assets for long-term shareholder value.
Accompanying the rebrand, the AltX-listed, black-owned and managed financing company announced an equity capital raise, issuing 1 million shares at R11 each. However, the reaction on the Johannesburg Stock Exchange (JSE) was less than favourable, with shares dropping 2.08% to R4.70 following the announcement. This volatile response underscores the challenges that accompany such ambitious shifts in a company’s operational strategy.
As part of a long-term treasury approach, Altvest first acquired 1.00464 Bitcoin (BTC) back in February. The company indicated that this step was a crucial addition to its strategy, aiming to provide shareholders with a stake in a “resilient and globally liquid asset.” Presently, Bitcoin is trading at approximately R1.95 million per coin, a significant increase from the R1.84 million valuation earlier this year, as noted by BR’s online research.
The move to formalise its Bitcoin Treasury Strategy aligns with global trends, resembling initiatives by notable companies such as MicroStrategy, Tesla, and Marathon Digital Holdings. The directors of Altvest articulated that their decision to accumulate Bitcoin will serve to preserve value, act as a hedge against inflation, and enhance long-term shareholder exposure to Bitcoin’s potential growth.
In their recent report, management reassured shareholders that existing operations would not be disrupted, maintaining the continuity of services including credit and equity funding, as well as asset management associated with the Altvest Credit Opportunities Fund, Umganu Lodge, and Bambanani. This hybrid strategy seeks to provide stable income from established investments while simultaneously capitalising on the purported upside of Bitcoin.
Despite the enthusiasm surrounding cryptocurrencies, it is noteworthy that as of now, the JSE lacks a regulatory framework governing issuers who invest in crypto assets. Altvest’s board has expressed its commitment to adhering to any such regulations once they are established, reflecting an awareness of the evolving landscape within the financial and crypto sectors.
Looking forward, the company has outlined plans to engage in additional capital-raising activities aimed at increasing its Bitcoin holdings. This multifaceted approach not only highlights Altvest’s innovative vision but also its commitment to democratizing access to alternative investment opportunities.
In the financial year ending February 28, Altvest reported a profit of R47.94 million, propelled by revenue streams that included R7.59 million from services and significant fair value gains in investments. The rise in earnings is attributed to improved loan book performance and a decrease in default rates among SMEs, signalling a stable foundation as the company embarks on this bold new trajectory.