Thumzup Media Corporation (NASDAQ:TZUP) Makes Major Bitcoin Investment

Thumzup Media Corporation (NASDAQ:TZUP) has recently made a significant move within the digital asset space. The company announced on January 6, 2025, the purchase of 9.783 Bitcoin (“BTC”) for $1,000,020, with an average price per Bitcoin of $102,220 inclusive of fees and expenses. Thumzup’s Management has sought approval from its Board of Directors to allocate up to 90% of its liquid assets towards Bitcoin holdings.

Coinbase Prime is playing a vital role in this investment, serving as the custodian and offering self-custodial wallet services for Thumzup’s Bitcoin holdings. The company plans to commence compensating gig-economy workers in Bitcoin in the near future, adhering to all pertinent laws and regulations.

As a result of the BTC investment, Thumzup is amending its risk factors, supplementing those mentioned in its Quarterly Report on Form 10-Q for the three months concluded on September 30, 2024 (Q3 2024 Form 10-Q), with additional risk factors. These risks underscore the volatile nature of Bitcoin, its lack of interest or dividend payments, and the untested nature of the company’s Bitcoin acquisition strategy.

One of the contemplated risks includes counterparty risks associated with Bitcoin custody, given the custody is not fully addressed under applicable insolvency laws. The broader digital assets industry is also confronting counterparty risks that could impact Bitcoin’s adoption rate, pricing, and utility.

Moreover, potential changes in the accounting treatment of Bitcoin holdings could significantly affect financial reporting and results. Thumzup is preparing for the impact of FASB’s ASU 2023-08, foreseeing increased volatility in financial performance due to the adoption of fair value measurements for Bitcoin holdings.

The company acknowledges the dynamism in the digital assets sector and the uncertainties tied to regulatory actions and legal classifications. Thumzup also points out various risks related to security breaches, cyberattacks, and potential theft of Bitcoin that could adversely affect its financial condition and operational outcomes.

While Thumzup intends to retain Bitcoin in custody accounts with reputable custodians, the volatile nature of the digital asset may pose challenges in times of market instability. Regulatory changes, reclassification of Bitcoin, and potential limitations on Bitcoin trading venues could have adverse effects on the value of the digital asset and subsequently impact the company’s stock price.

Thumzup emphasizes the novelty and uncertainty surrounding Bitcoin and digital assets, asserting that future developments in the regulatory landscape could introduce additional risks. Uncertainties around the legal, commercial, and technical aspects of Bitcoin trading underscore the complexities faced by entities delving into digital asset investments.

The company reminds stakeholders that its Bitcoin holdings are liquid in a different capacity than traditional cash assets, underscoring the potential shortfall in using Bitcoin as a source of liquidity during adverse market conditions. Concerns about regulatory reclassifications and cybersecurity breaches adding to this ambiguity demonstrate the multifaceted challenges accompanying Bitcoin investments.

Thumzup recognizes the significance of effectively navigating the evolving digital asset space and clarifies its intent to comply with regulatory frameworks while strategically managing risks associated with its Bitcoin acquisitions.

Exhibits include the Form of Coinbase Prime Broker Agreement and the Cover Page Interactive Data File, integrating Inline XBRL.

With signed authorization from the CEO, Robert Steele, Thumzup Media Corporation is progressing in its transformation toward embracing digital assets, aiming to mitigate risks and optimize opportunities in this dynamic landscape.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Thumzup Media’s 8K filing here.

Thumzup Media Company Profile

Thumzup Media Corporation is a provider of social media branding and marketing solutions which allow businesses and brands to pay customers and fans cash through Venmo and PayPal for their posts on social media. Thumzup Media Corporation is based in Los Angeles, CA.