Profitability eludes Canaan despite further growth

DV8, a Thai company that recently pivoted to become Southeast Asia’s first Bitcoin treasury firm, has carried out an initial capital raise to fund its new strategy. Up until recently, DV8’s business activites were confined to media, innovation and technology. It emerged earlier this month that the company was being acquired by a group of Bitcoin-focused investors.  The consortium includes privately-held Bangkok-headquartered investment firm Kliff Capital, hedge fund manager UTXO Management and Taipei-headquartered crypto-backed venture capital firm Sora Ventures. It also includes Simon Gerovich, the CEO of Metaplanet, Asia’s largest Bitcoin treasury company.Photo by Thought Catalog on UnsplashThai market potentialAt the time, Sora Ventures founder Jason Fang told Decrypt that there is great potential in the Thai market, giving DV8 the potential “to be the next Metaplanet on SET [Stock Exchange of Thailand]." The company recently appointed Chatchaval Jiaravanon as its new chairman. Jiaravanon currently serves as the founder and chairman of Water Asia and Charoen Energy, while independently owning Fortune magazine.  Alongside Jiaravanon, new appointments have also been made to the company’s board as it looks to revamp its leadership team to deal with the challenge of pivoting and pursuing a Bitcoin treasury strategy. Share issuanceA filing with SET on July 16 has revealed that the company has proceeded to raise 241 million baht, equivalent to $7.44 million. In raising this capital, the company issued 301,491,057 new shares. The shares were issued under DV8-W2 warrants with a strike price of 0.80 baht per share. Over the course of the past 12 months, a plethora of corporations around the world have adopted Bitcoin either as a strategic asset to hold on their balance sheets or they’ve taken matters further and followed companies like Strategy (formerly MicroStrategy) and Japan’s Metaplanet, with the Bitcoin treasury becoming the central focus of the business. Bitcoin treasury debateThe practice has proven to be controversial with some believing that Michael Saylor’s Strategy has found a workable approach using leveraged debt financing within TradFi to accumulate Bitcoin. Others like short seller Jim Chanos has called the Strategy approach “financial gibberish.” Chanos recently debated Bitcoin investor Pierre Rochard on the subject on The Investor's Podcast. The podcast provoked a discussion on X, with Grok, the AI bot integrated within X, coming down in favor of Rochard’s pro-Strategy argument, prompting Chanos to tell Grok that it was drunk and to stop posting.Aside from those companies that have pivoted entirely to Bitcoin treasury firms, many others who have started to accumulate some Bitcoin have been struggling companies.  Vincent Liu, chief investment officer at Taipei-headquartered Kronos Research said recently that “when struggling firms make sudden moves, it often feels like a short-term stunt or hype play." On the other hand, he added: “When a company builds a BTC treasury with strategy, conviction, and clear communication, it signals strength.” Taking to social media on July 14, Belgian economist and Bitcoin investor Tuur Demeester set out his thoughts on the opportunity that Bitcoin treasury companies are exploiting: “Who else in this world can borrow at below 0.5% interest rates, when real inflation is above 10%? Bitcoin Treasury companies seem to have found, or are creating, a growing hole in a giant dam.”

Hong Kong last week entered the pilot phase of Project Ensemble, an initiative focused on developing infrastructure for a tokenized market and creating a sandbox where institutions can test blockchain systems in real business environments. Set to run through 2026, the pilot involves the Hong Kong Monetary Authority (HKMA), several banks, and other industry participants. Its early work will examine how tokenized deposits can be used in money market fund transactions and how these tools might support real-time liquidity and treasury management. Interoperability key to tokenizationCommenting on the development, Hong Kong Securities and Futures Commission (SFC) CEO Julia Leung said, “To scale tokenisation of investment products, interoperability is key.” She added that the measure announced on Nov. 13 by the HKMA “will gradually allow interbank settlement of tokenised deposits in real time 24/7.”Photo by Ibrahim Rifath on UnsplashFollowing the HKMA’s announcement, Ant International, the global arm of Ant Group, revealed that it is joining Project Ensemble’s Architecture Community. As part of this digital finance effort, Ant International will help design and advance the tokenization ecosystem in the special administrative region, contribute to defining industry standards, and support broader industry adoption. Corporate initiatives in digital financeSeparately, Ant International also signed a memorandum of understanding with Swiss bank UBS to explore new opportunities in tokenized deposits, leveraging Ant’s blockchain platform Whale. Under this partnership, UBS Digital Cash, a blockchain-based payment solution developed by UBS, will be used to support Ant International’s global treasury operations. Young Jin Yee, Co-Head UBS Global Wealth Management Asia Pacific and Country Head UBS Singapore, said the collaboration with Ant aims to achieve “a real-time, multi-currency payment solution that sets standards for transparency and efficiency.” Hong Kong has been seeing a noticeable pickup in crypto-related activity more broadly. According to a post on X by Unfolded, AMINA, a Swiss-regulated institution, is now the first international banking group to roll out full crypto trading and custody services in Hong Kong. Adding to this momentum, companies are stepping up their Bitcoin accumulation. In its third-quarter results announcement, Boyaa International, a Hong Kong–listed firm specializing in online card and board games, reported a quarter-over-quarter increase of 738 Bitcoin. As of Sept. 30, its total holdings stood at 4,091 Bitcoin at an average cost of about $68,114 per coin. Adoption trends and market contractionThis push into the crypto sector aligns with broader digital asset adoption across Asia. A recent survey by CoinDesk and Protocol Theory of 4,020 individuals aged 18 to 64 in 10 Asian countries found potential crypto ownership of around 25% among respondents with internet access. The survey also noted that roughly half of adults familiar with crypto plan to use it within the next year or so. Despite the uptick in activity and interest, the market itself is currently in a downturn, with Bitcoin falling below the $90,000 mark on Nov. 18 for the first time since April 22. Analyzing the move, CoinDesk’s Omkar Godbole said Bitcoin looks oversold, as the 14-day relative strength index (RSI) has slipped under 30, indicating the drop may be steep enough to trigger a pause or a possible rebound. Godbole drew a parallel with price action earlier in the year, noting that February was the last time the RSI fell below 30, when Bitcoin was trading under $80,000. After that decline, the market bottomed out at around $75,000 in April, a pattern that traders may be watching closely as they assess the current pullback. At the time of publication, Bitcoin was trading around $90,400 against USDT on Binance. 

HK Regulators Facilitate Dialogue between Banks and Crypto EnterprisesIn a recent column, Arthur Yuen, Deputy CEO at the Hong Kong Monetary Authority (HKMA), stated that the HKMA and the Securities and Futures Commission (SFC) will jointly convene a meeting on Friday to share opinions on providing banking services to virtual asset service providers (VASPs).Proportionate CDD measuresYuen said that banks should “differentiate the risk levels of customers and apply proportionate CDD [customer due diligence] measures,” and “refrain from adopting a ‘one-size-fits-all’ approach to reject account opening applications.” To address misconceptions about CDD, the HKMA issued a circular on Thursday, offering further clarification and sharing notable cases and best practices.The HKMA called on banks to enhance employee training on account opening procedures and create task forces to help companies seize new business opportunities. The HKMA plans to actively take part in developing and introducing international standards, and provide guidance and support for banks to adopt appropriate anti-money laundering measures.SFC’s guidelines in MayMeanwhile, SFC CEO Julia Leung said in a discussion with Bloomberg that the SFC will issue virtual asset guidelines in May.Reactions on TwitterIn his tweet, Justin Sun, the founder of blockchain DAO ecosystem Tron, hinted at the potential development of a Tron-based stablecoin in Hong Kong. The Hong Kong Innovation Encryption Fund (HKIEF), an investor in blockchain projects, also took to Twitter to predict the details of a regulatory framework for cryptocurrencies in the city.According to HKIEF, USDT and USDC will be classified as security tokens, while BTC and ETH won’t be deemed securities. Exchanges trading non-security tokens will need both a VASP license and a trust license. Hong Kong-based virtual asset exchanges will be required to obtain a full license by May 31, 2024.