JSE-listed investment company Altvest Capital is doubling down on its bitcoin strategy, saying the cryptocurrency — which has become one of the most liquid global assets with daily trading volumes exceeding $20bn — is a good hedge against the rand’s volatility.
The company bought its first tranche of bitcoin in February, making it the first publicly listed company in Africa to adopt the cryptocurrency as a strategic treasury asset.
In its annual report published on Monday, the company said its purchase of bitcoin provides it with the flexibility to convert bitcoin into fiat currency at any time, mitigating liquidity risks associated with holding alternative assets.
“The decision to use bitcoin as a treasury asset requires a rigorous analysis of its financial, economic and strategic benefits. An outline as to why bitcoin is an appropriate treasury reserve asset for Altvest Capital, particularly within the SA economic context, is set out hereafter,” said CEO Warren Wheatley.
“The rationale is based on Bitcoin’s ability to hedge against inflation and currency devaluation, its superior risk-adjusted returns relative to Altvest’s cost of capital, and its growing global adoption as a legitimate store of value.”
Altvest said bitcoin also presents a low opportunity cost relative to debt financing, arguing that with SA interest rates now at historically moderate levels, the opportunity cost of acquiring bitcoin through leverage is justifiable.
Another bitcoin drawcard for Altvest is that it expects the cryptocurrency’s appreciation to offset the real cost of capital, making it an accretive asset to the balance sheet.
“From a capital allocation perspective, Bitcoin’s long-term appreciation has significantly outperformed traditional asset classes. Over the past decade, bitcoin has achieved a compounded annual growth rate exceeding 50%, whereas major equity indices and fixed-income assets have delivered materially lower returns,” the company said.
“Bitcoin is expected to yield returns that exceed Altvest’s weighted average cost of capital. This means that even if bitcoin were financed through debt, its long-term appreciation would still yield a positive economic return.”
The bitcoin price has recently consolidated about $105,000 as liquidity builds up on either side of the spot price.
The price of bitcoin has surged since US President Donald Trump’s re-election in November 2024, reaching a record high of $111,970 a few weeks ago.
The Trump administration is seen to be friendly to cryptocurrencies. This sentiment was boosted by Trump’s appointment of pro-crypto figures to key regulatory roles, such as naming Paul Atkins as the new Securities and Exchange Commission chair.
Wheatley said the company is not worried about Bitcoin’s volatility.
“While bitcoin is historically volatile, treasury allocation strategies (such as phased accumulation, structured derivatives, or loan collateralisation) can mitigate downside risks. Additionally, Bitcoin’s volatility has been decreasing over time, particularly as adoption increases and institutional participation deepens,” he said.
“In addition, we are able to secure funding against the bitcoin holdings rendering a flash or forced sale improbable.”
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