Thumzup, a social media marketing technology company headquartered in Los Angeles, is doing just that. They are looking to diversify their corporate treasury by adding several digital assets. The firm recently closed a $6.5 million round of equity capital. Now, it has the board’s consent to investigate the costs and benefits of adding Dogecoin, Litecoin, Solana, XRP, Ethereum and the USDC stablecoin to its treasury. This decision is a precursor to more mature and corporate interest in digital assets as more than just Bitcoin from public companies.
Expanding Digital Asset Strategy
With this step, Thumzup is hitting the crypto space hard and innovating in other cryptocurrencies. This decision reflects its desire to improve its skills in the influencer marketing area. Founded in 2020, the company operates a platform that enables brands to connect with everyday social media users, compensating them for promoting products and services on their personal accounts. Thumzup has particularly forward-looking plans to allow influencers on its platform to get paid in digital assets. This change will make it more attractive to a young, tech savvy crowd.
CEO Robert Steele is spearheading this initiative, emphasizing the potential for these assets to enhance the company's financial strategy and operational efficiency. Despite the company having received approval to develop these assets, a final investment decision has not yet been reached.
Financial Position and Market Reaction
The $6.5 million raise now in the company’s rear-view mirror gives Thumzup the necessary capital to go after these valuable digital assets. Thumzup plans to use some of these funds to buy back the tokens. Currently, Bitcoin is the only cryptocurrency that Thumzup keeps in its corporate treasury. Investors hardly reacted positively to the diversification. Consequently, Thumzup’s stock price nosedived to $9.50, a drop of 23% by the close of the trading day.
It’s worth mentioning that Thumzup is not a crypto-native company. As controversial as it is, its core business is still built around social media marketing technology.
Bitcoin's Prominence in Corporate Treasuries
Thumzup’s adventure into alternative digital assets comes amid a growing, though uneven, wave of Bitcoin adoption by public companies. At the moment, 143 public companies have added Bitcoin to their balance sheets, with a total market cap of these public BTC holdings at $93.3 billion. Bitcoin remains the undisputed leader as the primary cryptocurrency held in corporate treasuries. Thumzup’s foray into other digital assets signals an enriching interest to diversify within the digital asset class.
