Prenetics stops buying bitcoin as crypto treasury trade loses steam
Prenetics (PRE), a health-sciences company that raised $48 million earlier this year, partially to build a bitcoin treasury, said it decided to stop purchasing BTC amid prolonged weakness in the cryptocurrency market.
The company rolled out its bitcoin accumulation strategy in June, following a model championed by Michael Saylor’s Strategy Inc, in which firms raise capital to buy and hold crypto on their balance sheets. The business model gained traction earlier this year as crypto prices rose, but enthusiasm faded after the steep market downturn in October.
On Oct. 27, Prenetics CEO and co/founder Danny Yeung announced the funding round, which included investors such as Kraken, Exodus (EXOD), GPTX and American Ventures. He said the funds would help its "IM8" business scale globally while accumulating 1 BTC daily toward a goal of $1 billion in revenue and bitcoin within five years.
However, the firm said in a statement on Tuesday that it stopped purchasing bitcoin on Dec. 4 to focus its resources exclusively on IM8, which it said has generated more than $100 million in annualized recurring revenue (ARR) since it launched 11 months ago.
“The phenomenal success of IM8 has exceeded all expectations and scaled much faster than we originally anticipated,” Yeung said. “Our board and management team unanimously agreed that the most promising path to creating significant, sustainable shareholder value is to devote our undivided attention to this opportunity clearly visible in IM8.”
Prenetics, backed and co-founded by English football icon David Beckham, said it won't allocate any existing or new capital for the purpose of buying additional bitcoin. However, it still plans to hold its existing 510 bitcoin as a reserve asset, worth nearly $45 million as of Tuesday afternoon ET.
Prenetics shares have risen 189% this year, while Michael Saylor's MSTR fell nearly 48% and bitcoin dipped about 5.6%.
Read more: Is the Bitcoin Digital Asset Treasury Model Broken? Architect Partners Says No
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