British companies that rushed into the Bitcoin boom have collectively lost almost £80m after a sharp slump in the cryptocurrency’s price.
UK-listed firms have spent more than £360m buying Bitcoin in a bid to emulate so-called “Bitcoin treasury” companies, whose valuations are driven largely by their crypto holdings rather than their underlying operations. The structure allows investors to gain exposure to Bitcoin via the stock market without owning the asset directly.
The strategy gained traction earlier this year as Bitcoin prices surged and US-listed peers such as Strategy saw their valuations soar, briefly topping $127bn (£95bn) during the summer rally.
However, many UK companies appear to have bought near the top of the market. According to calculations by The Telegraph, thirteen UK-listed firms spent around £364m acquiring close to 4,300 Bitcoin at an average price of $113,105 (£85,076) each.
With Bitcoin trading at around $87,950 on Friday — roughly 22% below that average purchase price — those holdings are now significantly underwater. When combined with a £40m Bitcoin sale by crypto firm Satsuma, the total losses across the group amount to approximately £79.1m.
More than half of those losses are attributed to The Smarter Web Company, a Guildford-based web design business that pivoted into cryptocurrency earlier this year and listed on the Aquis Stock Exchange. The firm was valued at just £4m in April, before its market capitalisation surged to £1.1bn by June — briefly making it worth more than established names such as Pets at Home, WH Smith and Wetherspoons.
Since then, its shares have fallen by more than 90% from their peak, although they remain around 14 times higher than at the point of listing.
Chief executive Andrew Webley said that “a lot of people had jumped on the bandwagon” and insisted the company would continue buying Bitcoin for the long term.
“Obviously I’m disappointed with where the share price is,” he said. “There will be periods when it’s overvalued and when it’s undervalued. For people who want to invest for more than eight months, it’s still got great potential.”
Bitcoin surged after Donald Trump’s election victory last year on expectations of a more crypto-friendly administration and hopes that a US Bitcoin Reserve could be established. However, prices have since retreated, falling 12% this year amid broader concerns over stretched asset valuations.
Despite cryptocurrencies becoming more mainstream — with banks and regulators increasingly embracing stablecoins linked to traditional currencies — retail interest in Bitcoin has waned. The proportion of Britons holding Bitcoin has dropped from 12% last year to 8%, according to the Financial Conduct Authority.
