Small-Cap Crypto Execs Talk Bitcoin On Corporate Balance Sheets: 'It Makes A Lot Of Sense'

At the Benzinga Global Small Cap Conference Friday, Benzinga cryptocurrency editor Catherine Ross hosted a panel discussion on how digital currencies are disrupting finance and providing opportunities for innovation in payments, privacy and efficiency.

The panel discussion included Geoff Morphy, president of Bitfarms Ltd BFARF, Charles Allen, CEO of BTCS Inc BTCS, Richard Byworth, CEO of Diginex Ltd EQOS and Sheldon Bennett, CEO of Dmg Blockchain Solutions Inc DMGGF.

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Adding Crypto To The Balance Sheet: Allen said more companies are beginning to add cryptocurrencies to the balance sheet, including high-profile names like Tesla Inc TSLA, Square Inc SQ and MicroStrategy Incorporated MSTR.

“It makes a lot of sense for larger companies to start putting crypto on their balance sheets. It’s a nice inflationary hedge,” Allen said.

Accepting crypto as a payment method is more difficult for companies to do, he said. 

Byworth said Diginex helps a lot of international companies add Bitcoin BTC/USD to their balance sheets. 

“From the perspective of 'does it make sense?' yeah, we are big believers of the inflationary hedge with the very disproportionate reaction we’ve seen to the pandemic by central banks, which was in fairness pretty much their only option given all the printing that they’ve done since 2008,” Byworth said.

Up until 2021, Morphy said Bitfarms was in a position in which it had to sell almost every Bitcoin it mined just to pay the bills and invest in growth.

“In January of this year, we actually started a Bitcoin retention program, and we have well over 500 Bitcoin on the balance sheet now,” he said.

“We’re big bulls, and when you can mine a Bitcoin for under $10,000 and it’s currently in the market at between $50,000 and $60,000, what we enjoy doing is putting it on the balance sheet and then because that’s effectively our adjusted EBITDA, we get the compounding feature of not just having the Bitcoin on our balance sheet from a low cost, but we basically embed our profit in there as well to compound it.”

Responding To Elon Musk: Cryptocurrencies have come under fire this week after Tesla, Inc. TSLA CEO Elon Musk said Tesla will no longer be accepting Bitcoin as payment due to its negative impact on the environment.

Bennett said DMG Blockchain uses the cheapest energy available for its mining, which is often renewable.

“Solar is the cheapest energy, wind is the cheapest energy, geothermal is the cheapest. Iceland is a great example of that,” Bennett said.

“All Bitcoin mining companies are looking for the lowest-cost energy. Any company is.”

When asked about which cryptos their companies hold and which they hold in their personal accounts, the consensus among the executives is that they are bullish on Bitcoin and Ethereum ETH/USD.

None of the panel members said their companies hold shares of Dogecoin DOGE/USD or other meme-inspired cryptos.

To see more of this panel discussion or any of the other presentations at the Benzinga Small Cap Conference, purchase lifetime access to the video recordings of the event at this link.