Townsquare Media, New Public Company Reporting Bitcoin Ownership As Their Asset

JAKARTA - Townsquare Media, a digital marketing company and radio station based in New York is the latest business entity to support native cryptocurrencies with the addition of USD 5 million (IDR 72.6 billion) worth of Bitcoin (BTC) to its balance sheet.

A filing with the Securities and Exchange Commission (SEC) disclosing Townsquare's Bitcoin purchases was first picked up by Macroscope, the institutional trading-focused Twitter account that posted the findings on May 10.

As per the filing, the company “invested a total of 5 million US dollars into Bitcoin” during the first quarter of 2021 and provided an explanation of why it chose crypto investments.

“The company believes in the long-term potential of digital assets as an investment. Companies can increase or decrease their digital asset holdings at any time based on our view of market conditions," Townsquare said in a statement.

While the price of Bitcoin at the time of purchase was not disclosed. But Townsquare said it recorded an impairment loss of $400,000 resulting from the "fair value change" of its digital asset holdings during the quarter.

The so-called losses appear to be caused by the unusual way for companies that need to report crypto holdings. Townsquare also said it could sell its Bitcoins for a total of $6.2 million on March 31, when the Bitcoin price for the day closed at around $45,500.

The company states that it views its Bitcoin investments as liquid due to the ease of converting them into cash using crypto exchanges.

While the purchases are smaller when compared to the nearly $3 billion worth of Bitcoin held by MicroStrategy, Townsquare Media is in the middle when it comes to the amount of crypto held by publicly traded companies.

According to Bitcoin Treasures, a site that measures Bitcoin held by companies, Townsquare will sit somewhere around Bitcoin mining company Cleanspark Inc which holds about $4.3 million, and Cathedra Bitcoin Inc. holding Bitcoin worth more than 5 million US dollars.

With Bitcoin prices sliding this year and recently hitting 10-month lows, other companies with large positions in the world's first cryptocurrency have reported losses from having the asset on their balance sheets.

Earlier in May, crypto investment manager 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 will also have to reassure investors that the company can cover its debt if requested due to a $205 million Bitcoin-backed loan it took out in March.