Nexon, Having Purchased $100 Million Worth of Bitcoin, Nears 'Break-Even' Point

[Asia Economy Reporter Kang Nahum] Nexon, which once faced a 40% unrealized loss from Bitcoin investments, is now on the verge of recovering its principal. This comes as cryptocurrency prices have recently been on an upward trend.

According to Upbit, a domestic cryptocurrency exchange, as of 5:50 PM on the 11th, Bitcoin was trading at 69.09 million KRW, up 1.9% from the previous day. The price has been rising continuously since the 8th.

Along with the price increase, Bitcoin's market capitalization has surpassed Facebook. According to CoinMarketCap, a cryptocurrency market data site, Bitcoin's market cap reached $1.0692 trillion (approximately 1,278.7632 trillion KRW) on that day.

Bitcoin has been rising this month amid expectations that related exchange-traded funds (ETFs) may be launched in the U.S. stock market. On the 29th of last month (local time), Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), stated at the North American Asset Management Future Conference, "I expect the SEC’s relevant division to review the application documents related to Bitcoin ETFs." Industry insiders anticipate that a decision on the launch of Bitcoin ETFs will be made by November.

The recent uptrend has brightened the mood at Nexon, which had purchased a large amount of Bitcoin. Earlier, Nexon Japan acquired $100 million (approximately 113 billion KRW) worth of Bitcoin in April. The total amount purchased was 1,717 BTC, with an average purchase price of $58,226 (approximately 65.8 million KRW) per Bitcoin.

The current valuation of Bitcoin held by Nexon is about 119 billion KRW. Considering the exchange rates and other factors from six months ago when the Bitcoin was purchased, this effectively means Nexon has recovered its principal. Nexon had at one point recorded a 40% loss (approximately 46 billion KRW) on its principal.

Nexon does not appear to plan to sell its Bitcoin holdings immediately. In May, Nexon announced that it intends to maintain its Bitcoin holdings as a long-term cash-equivalent asset and a key tool in its capital allocation strategy. Additionally, Nexon explained that since Bitcoin accounts for less than 2% of the company’s cash-equivalent assets, any further decline would not have a significant impact.