Remixpoint has announced a significant change in its strategic use of funds from a recent share issuance. Instead of allocating these funds to Web3 investments, the company will now prioritize its electric vehicle (EV) initiatives. This pivot has sparked discussions regarding the future of its Bitcoin holdings.
The company has decided to reallocate ¥1.2 billion, originally intended for Web3 and cryptocurrency investments, to its core "battery and energy businesses." This decision is reportedly a response to a challenging market environment and a perceived scarcity of short-term, high-growth Web3 projects that offer a balance between returns and risks.
Rather than using these funds to acquire more Bitcoin for its treasury, Remixpoint will now invest in enhancing its EV-related operations. These enhancements include developing charging stations and improving energy optimization, areas that are fundamental to Remixpoint's business strategy and align with Japan's planned phase-out of gasoline cars by 2035.
Remixpoint Pivots to Focus on EVs
This strategic shift has led to speculation about the company's existing Bitcoin reserves. However, there has been no official indication of any plans to sell these holdings, and the company's current Bitcoin assets are expected to remain untouched as they plan to "HODL" them for the long term.
Remixpoint reportedly began building its Bitcoin treasury in 2024 as a strategy to hedge against the national currency, a move similar to that of Metaplanet. By November of that year, the company had accumulated up to 216 BTC.
The value of these holdings has since seen a substantial increase, surpassing 1,300 BTC around September of this year. This growth made it surprising to many when, on October 23, Remixpoint announced that its board of directors had resolved to suspend equity financing—fundraising through the issuance of new shares—for the purpose of acquiring crypto assets.
Consequently, the company stated that it would not issue shares, including stock acquisition rights, for future cryptocurrency acquisitions like Bitcoin. Instead, it would utilize cash on hand for such purchases. This announcement was interpreted as an effort to prevent the dilution of per-share value that would typically accompany the issuance of new shares.
Despite this announcement, Remixpoint continued its aggressive investment approach. The company purchased additional Bitcoin worth approximately 570 million yen over five installments during October. The funds for these purchases were entirely raised through the exercise of the 25th stock acquisition rights.
Market Conditions and Potential Selling Pressure
The cryptocurrency market has recently experienced a renewed sell-off. Bitcoin and Ether have both seen sharp declines, with Bitcoin hovering around the $84,000 mark after an approximately 8% drop, and Ether falling by about 10% to the $2,700 range.
Solana was also trading around $124, and other closely watched tokens were also in negative territory. Analysts attribute this fresh slide in digital assets to a broader risk-off sentiment at the beginning of a new month.
According to Ben Emons, founder and CIO of Fedwatch Advisors, market participants remain "nervous" following the recent Bitcoin sell-off. He indicated that Monday's reversal is broadly linked to a significant exchange liquidation totaling $400 million.
Speaking with CNBC's "Squawk Box Europe" on Monday, Emons highlighted the substantial leverage present across Bitcoin exchanges, which can reach up to 200x in some cases. He anticipates further liquidations if Bitcoin prices do not rebound.
Monday's dip followed a sharp sell-off in October that also impacted the stock market. Emons noted that Bitcoin has shown increasing correlation with certain indexes, including the Nasdaq.
"It's predominantly retail driven, that's the worrying part of it, because retail reacts very differently than institutional [investors]," he stated, pointing to the decentralized nature of crypto exchanges and the opaque characteristics of the asset class. "That is something to reckon with going forward from here, as more and more leverage is used in this space."
Macroeconomic concerns, such as uncertainty surrounding a potential U.S. interest rate cut, continue to affect investor sentiment. Additionally, lingering doubts about the valuations of artificial intelligence-related stocks contributed to market volatility in November, further heightening crypto price fluctuations.
Observers believe that several indicators suggest potential for further short-term weakness in digital assets.