UK Bitcoin treasury company Smarter Web Company weighs acquisitions

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The Smarter Web Company, the United Kingdom’s largest corporate Bitcoin holder, is considering acquiring struggling competitors to expand its treasury, CEO Andrew Webley said.

Webley told the Financial Times that he would “certainly consider” buying out competitors to acquire their Bitcoin (BTC) at a discount.

According to BitcoinTreasuries.NET data, The Smarter Web Company is the world’s 25th biggest and the UK’s top corporate Bitcoin treasury. It currently holds 2,470 BTC worth nearly $275 million.

The Smarter Web Company’s CEO also said the company aspires to enter the FTSE 100 — the UK’s top 100 listed companies index. He also noted that the firm changing its name is “inevitable” but said that he needs “to do it properly.”

Alex Obchakevich, the founder of Obchakevich Research, told Cointelegraph that “buying the assets of bankrupt crypto companies often promises discounts, but the reality is actually much tougher than everyone thinks.”

Obchakevich cited the bankruptcies of crypto exchange FTX and crypto lender Celsius. He explained that while initially discounts reached 60% to 70%, “after deducting liabilities liquidated in bankruptcy, encumbrances removed by the court and taxes, the net discount drops to 20–50%.”

“This attracts investors with expertise because the assets are undervalued due to their urgency.“

Webley’s comments came after Smarter Web’s stock fell nearly 22% on Friday, dropping from $2.01 at the open to $1.85 at the time of writing. The decline came despite BTC gaining more than 1% over the past 24 hours.

Over the last month, Bitcoin also lost over 4% of its value, while The Smarter Web Company’s price fell by around 35.5%.

Smarter Web’s price correction also comes after the UK allowed retail investors to access crypto exchange-traded notes (cETNs) in early August, with the change taking effect from Oct. 8. This provides an alternative to investing in crypto treasury companies, which were previously the most accessible regulated vehicle for getting exposure to digital assets in the UK.

Profiting from the failure of competitors

Webley’s comments about acquiring competitors follow reports that Bitcoin treasuries, especially new and smaller ones, are likely to encounter trouble. Coinbase head of research David Duong and researcher Colin Basco recently said that crypto-buying public companies are entering a “player vs player” stage that will see firms competing harder for investor money.

They said that “strategically positioned players will thrive” and supercharge the crypto industry with their capital flow. Also, analysts said that this market segment is quickly becoming oversaturated and that many crypto treasuries will not survive in the long term.

Josip Rupena, CEO of lending platform Milo and a former Goldman Sachs analyst, told Cointelegraph at the end of last month that crypto treasury companies mirror the risk of collateralized debt obligations, which played a key role in the 2008 financial crisis.

“There’s this aspect where people take what is a pretty sound product, a mortgage back in the day or Bitcoin and other digital assets today, for example, and they start to engineer them, taking them down a direction where the investor is unsure about the exposure they’re getting,” he said.

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