Semler Scientific, a little-known medical technology company, saw its shares soar on Tuesday after the company said it would follow MicroStrategy's lead and adopt Bitcoin as its primary treasury reserve asset.
The company, which is developing a product used to detect peripheral artery disease, also announced it would purchase 581 Bitcoin for approximately $40 million, including fees and expenses.
The company's shares surged 30% on Tuesday, while Bitcoin fell about 2%, according to Coin Metrics. Semler, which has a market capitalization of about $210 million, is down more than 30% so far this year.
“Our bitcoin treasury strategy and bitcoin purchases underscore our belief that bitcoin is a reliable store of value and an attractive investment,” Semler Chairman Eric Semler said in a statement.
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Semler Scientific surges after announcing Bitcoin financial strategy
“We believe that as a scarce and finite asset, Bitcoin has the unique characteristic of being able to act as a reasonable inflation hedge and safe haven during times of global volatility,” he added. “Given the difference in value between gold and Bitcoin, we believe there is potential for significant gains as Bitcoin gains increasing acceptance as digital gold.”
The move puts Semler at the same company as MicroStrategy, which began employing an aggressive bitcoin buying strategy in 2020 and has since traded primarily as a proxy for the cryptocurrency's price. The company's shares are up about 163% this year.
MicroStrategy was founded as an enterprise software provider, and in February of this year, the company announced it was shifting its company focus and brand to bitcoin development.
Semler said Tuesday that the company remains focused on its core medical products and services and will actively evaluate ways to use excess cash as it continues to generate revenue and free cash flow from selling blood flow tests.
Tesla and The Block are also among the companies that hold a certain amount of Bitcoin on their balance sheets.
Bitcoin has risen 60% this year and is trading near all-time highs, and many believe adoption by corporate finance departments is a better indicator of intuitive adoption than big funds holding and potentially trading the cryptocurrency.
However, regulatory uncertainty and ESG considerations have prevented this trend from progressing significantly yet.
