Although the purchase will not affect the millions of Bitcoin held by other companies, the company claimed it could have made $1.2million if it had sold its holdings in the first quarter.
Townsquare Media, an American digital marketing and radio station company based in New York, has added $5 million worth Bitcoin ( BTC) onto its balance sheet.
A US Securities and Exchange Commission (SEC filing disclosing Townsquare’s purchase of Bitcoin was first discovered by Macroscope. Macroscope is a Twitter account that focuses exclusively on institutional trading and posted the find Monday.
According to the filing, the company “invested an average of $5 million in Bitcoin” during the first quarter 2021. The filing also provided an explanation as to why it chose crypto investments, which was:
The Company believes in long-term investment potential for digital assets. Based on market conditions, the Company can increase or decrease its digital assets holdings at any time.
Townsquare stated that it suffered an impairment loss of $400,000 due to “changes in the fair value of its digital assets over the quarter.”
This loss is likely due to the unusual reporting requirements that companies have for crypto holdings. Townsquare stated that it could have sold its Bitcoin on March 31 for $6.2 million, as the Bitcoin price at that time was $45,500. Because it is easy to convert Bitcoin to cash via a crypto exchange, the company considers its Bitcoin investment liquid.
Although the purchase is not significant in comparison to MicroStrategy’s almost $3 billion Bitcoin stash, Townsquare Media is near the top of the list for the total amount of crypto owned by publicly traded companies.
According to Bitcoin Treasures (a site that measures Bitcoin owned by companies), Townsquare would be located around the Bitcoin mining company Cleanspark Inc, which has around $4.3 million, and Cathedra Bitcoin Inc. which has just over $5 Million worth of Bitcoin.
Other companies holding large positions in Bitcoin have suffered losses as a result of having the asset on the balance sheet.
In May, Galaxy Digital Holdings , a crypto investment manager, reported a $111.7million loss due to unrealized losses in its cryptocurrency portfolio. MicroStrategy CEO Michael Saylor, a Bitcoin advocate, also had to assure investors it could pay its debts if they were asked. This was due to a $205 million Bitcoin-backed loan that it took out in March.
