$2.5 Billion Insurance Firm Lemonade Adds $1 Million in BTC to its Balance Sheet

December 17, 2021, 10:00 AM AEST - 1 month ago

With US inflation up 6.8 percent over the past year, leading insurance company Lemonade has purchased a million dollars’ worth of bitcoin to help offset further erosion of its balance sheet.

It’s a move that could well prove a precedent for other large American businesses yet to invest in digital assets.

Lemonade, holding US$2.5 billion in assets, reported the purchase in an S-4 form that US publicly traded companies file with the Securities and Exchange Commission. “The company has ownership of and control over the purchased bitcoin asset and uses third-party custodial services to secure it,” Lemonade said in its accompanying statement. “The digital assets are initially recorded at cost and are subsequently remeasured on the consolidated balance sheets at cost, net of any impairment losses incurred since acquisition.”

Crypto Investment Catching On Among Large Non-Crypto Concerns

Lemonade’s move into crypto suggests that investing in cryptocurrencies is gaining popularity among businesses aiming to join the trend started by large companies such as Tesla and Latin American e-commerce giant MercadoLibre, which in Q1 2021 purchased US$7.8 million in bitcoin.

All three companies have a way to go to challenge the king of bitcoin balance sheets, MicroStrategy. The 25-year-old business intelligence, mobile software and cloud-based services company co-founded by Michael Saylor now holds a total of 122,478 BTC on its balance sheet at the remarkably low average entry price of US$29,861.

Although MicroStrategy owns less than 1 percent of total bitcoin supply, it has the highest BTC holdings of any public company. Chances are it will soon have a raft of challengers.

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