New York Digital Media Company Becomes Latest to Add Bitcoin to Its Balance Sheet

Townsquare Media, a New York-based digital marketing and radio station company, is the latest to support bitcoin, adding $5 million worth of bitcoin (BTC) to its balance sheet.

A filing with the U.S. Securities and Exchange Commission (SEC) disclosing Townsquare’s bitcoin purchases was first spotted and published on May 10 by Macroscope, a Twitter account focused on institutional trading.

According to the company’s filing, which “invested a total of $5 million in Bitcoin” during the first quarter of 2021, explaining why it chose to invest in the cryptocurrency, the company stated:

“The firm believes in the long-term potential of digital assets as an investment. The firm may increase or decrease its holdings of digital assets at any time based on our perception of market conditions.”

While the price at which bitcoin was purchased was not disclosed, Townsquare said it took a $400,000 impairment loss during the quarter due to a "change in fair value" of the digital asset it held.

The alleged losses appear to be due to the unusual way companies are required to report cryptocurrency holdings. Townsquare also said it could have sold bitcoin for a total of $6.2 million on March 31, when bitcoin closed at around $45,500 that day. The company said it considers its bitcoin investments to be liquid because it can be easily converted to cash using cryptocurrency exchanges.

While the acquisition is small compared to MicroStrategy’s nearly $3 billion in bitcoin reserves, Townsquare Media sits in the middle of the list in terms of the amount of cryptocurrency held by public companies.

Townsquare sits between Bitcoin mining firm Cleanspark Inc., which holds about $4.3 million in bitcoin, and Cathedra Bitcoin Inc., which holds more than $5 million, according to data from Bitcoin Treasures, a website that measures corporate bitcoin holdings.

As the price of bitcoin has slipped this year, hitting a 10-month low recently, other companies with large bitcoin positions have also reported losses due to having the asset on their balance sheets.

Earlier in May, cryptocurrency investment management firm Galaxy Digital Holdings reported a loss of $111.7 million in the first quarter of 2022 due to unrealized losses on its cryptocurrency portfolio. MicroStrategy CEO and bitcoin advocate Michael Saylor also had to reassure investors that the company could repay a $205 million bitcoin-backed loan it took in March if they asked.

Cointelegraph Chinese is a blockchain news information platform, and the information provided only represents the author's personal opinion, has nothing to do with the position of the Cointelegraph Chinese platform, and does not constitute any investment and financial advice. Readers are requested to establish correct currency concepts and investment concepts, and earnestly raise risk awareness.