Cash-Strapped Jiuzi's $1B Crypto Push Sparks Market Doubts

Jiuzi Holdings, a Chinese electric vehicle charging infrastructure company listed on Nasdaq, has approved a $1 billion cryptocurrency treasury policy, sparking market concerns over its high-leverage approach. The initiative, announced on September 24, 2025, authorizes the company to allocate funds to Bitcoin (BTC), Ethereum (ETH), and BNB, with future diversification requiring board approval. The move follows the appointment of Dr. Doug Buerger, a self-described “crypto expert,” as Chief Operating Officer to lead the strategy. CEO Tao Li emphasized the policy’s intent to “safeguard and enhance long-term shareholder value,” while Buerger clarified that the firm views crypto assets as “long-term stores of value to hedge against macroeconomic uncertainties”title1^[1].

The policy mandates that Jiuzi will not self-custody its crypto holdings, instead relying on external custodians deemed to have “highest level of security”title2^[2]. Oversight is managed by a newly established Crypto Asset Risk Committee, led by Chief Financial Officer Huijie Gao, which will report regularly to the board. This governance structure aims to balance innovation with risk management, though critics highlight the company’s current financial position as a potential red flag. Jiuzi’s latest SEC filings reveal cash and cash equivalents of just $943,000 as of October 31, 2024, alongside a net income loss of $55 million for the same periodtitle3^[3].

Market reactions to the announcement were volatile. Shares of JZXN surged nearly 70% in premarket trading, reaching $2.77, before retreating to a 10% decline by middaytitle4^[4]. The stock, which has plummeted over 99.9% in the past five years, exhibited a beta of 1.63–3.07, underscoring its sensitivity to market fluctuationstitle5^[5]. Analysts noted the disparity between the $1 billion investment cap and Jiuzi’s modest liquidity, with one report describing the strategy as “a significant leap in their financial strategy”title6^[6]. The company has not disclosed how it plans to raise the required capital, raising questions about its ability to execute the policy without external financing.

Regulatory ambiguity in China further complicates the move. While mainland authorities maintain strict crypto bans, Jiuzi’s Nasdaq listing allows it to operate under U.S. disclosure rules. The company’s decision to disclose crypto purchases via SEC Form 6-K filings aligns with international transparency standards, yet it risks regulatory scrutiny in its home market. Some analysts suggest the strategy could signal a broader trend, with other Chinese firms leveraging international listings to access crypto markets indirectlytitle7^[7].

The initiative has drawn comparisons to corporate crypto adoption strategies by firms like MicroStrategy, though Jiuzi’s approach is notably more aggressive given its small market capitalization of $89 million. Critics argue the high leverage could exacerbate existing financial vulnerabilities, particularly with the firm’s operating margin at -41,253.06% and a P/B ratio of 11.57, indicating potential overvaluationtitle8^[8]. Buerger’s emphasis on “long-term treasury management” contrasts with Jiuzi’s recent profitability challenges, creating a narrative of innovation versus fiscal caution.

Market observers remain divided. While the policy reflects a growing corporate appetite for crypto as a macro-hedge, Jiuzi’s execution risks highlight the sector’s inherent volatility. The company’s stock price swings and financial metrics underscore the tension between strategic ambition and operational reality. As the firm navigates this uncharted territory, its success will hinge on balancing speculative growth with sustainable risk management in a regulatory landscape still defined by Chinese authorities.