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Semler Scientific, a relatively obscure medical technology firm, made headlines on Tuesday as its shares skyrocketed following the company's announcement to adopt bitcoin as its primary treasury reserve asset. This strategic move mirrors the bold steps taken by MicroStrategy, a company known for its aggressive bitcoin acquisition strategy.
Specializing in products for detecting peripheral arterial disease, Semler revealed its purchase of 581 bitcoins, amounting to approximately $40 million, inclusive of fees and expenses. This significant investment underscores the company's confidence in bitcoin's potential as a stable store of value and a hedge against inflation. Eric Semler, the company's chairman, highlighted bitcoin's unique characteristics as a scarce and finite asset, suggesting that it could offer substantial returns as it gains wider acceptance as "digital gold."
Following the announcement, Semler's stock soared by 30%, despite bitcoin itself trading about 2% lower on the same day, according to Coin Metrics. The company, with a market capitalization of roughly $210 million, has faced a challenging year, with its stock down more than 30%.
Eric Semler articulated the company's strategic vision, stating, "Our bitcoin treasury strategy and purchase of bitcoin underscore our belief that bitcoin is a reliable store of value and a compelling investment. Given the gap in value between gold and bitcoin, we believe that bitcoin has the potential to generate outsized returns as it gains increasing acceptance."
Semler's decision aligns it with companies like MicroStrategy, which pivoted towards bitcoin acquisition in 2020 and has since seen significant stock performance, up about 163% this year. Initially focused on enterprise software, MicroStrategy rebranded to emphasize its commitment to bitcoin development.
Despite its new bitcoin strategy, Semler affirmed its ongoing dedication to its core medical products and services. The company plans to continually evaluate the use of its excess cash, generated from sales of its blood flow tests, to optimize financial returns.
Other notable firms, including Tesla and Block, also hold bitcoin on their balance sheets, signaling a broader trend of corporate adoption of the cryptocurrency. Bitcoin has risen 60% this year, nearing its all-time high, and many view its inclusion in corporate treasuries as a strong indicator of institutional acceptance.
However, widespread adoption remains hindered by regulatory uncertainties and environmental, social, and governance (ESG) concerns. Despite these challenges, Semler's bold move into bitcoin reflects a growing confidence among some companies in the long-term value and stability of digital assets.
