Whilst the purchase won’t cast a shadow on the billions worth of Bitcoin owned by other firms, the company said it could have made $1.2 million if it sold its holdings at the end of the first quarter.
Townsquare Media, a New York based digital marketing and radio station company is the latest business to back the original cryptocurrency with its addition of $5 million worth of Bitcoin (BTC) to its balance sheet.
A filing with the Securities and Exchange Commission (SEC) disclosing Townsquare’s purchase of Bitcoin was first picked up by Macroscope, a Twitter account which focuses on institutional trading who posted the find on May 10.
As per the filing the company “invested an aggregate of $5 million into Bitcoin” during the first quarter of 2021 and provided an explanation for why it chose a crypto investment, stating:
“The Company believes in the long-term potential of digital assets as an investment. The Company may increase or decrease its holdings of digital assets at any time based on our view of market conditions.”
Whilst the price of Bitcoin at the time of purchase wasn’t disclosed Townsquare said it recorded an impairment loss of $400,000 resulting from “changes to the fair value” of its digital asset holdings over the quarter.
The so-called loss appears to be due to the unusual way companies need to report on crypto holdings. Townsquare also stated it could have sold its Bitcoin for $6.2 million total on March 31, the price of Bitcoin that day closed at a price of around $45,500. The company stated it views its Bitcoin investment as liquid due to the ease of converting it to cash using a crypto exchange.
( Jesse Coghlan, Cointelegraph, 2022 )