DDC Enterprise Adopts Bitcoin Reserve Plan, Targets 5,000 BTC in 36 Months

DDC Enterprise, a US consumer brand with roots in Hong Kong and operations in mainland China, has announced a significant shift in its financial strategy by adopting a Bitcoin (BTC) reserve plan. The company, also known as DayDayCook, revealed this initiative in a shareholder letter on May 15, 2024. As part of this strategy, DDC has already acquired 100 BTC for approximately $10.4 million and plans to accumulate a total of 5,000 BTC over the next 36 months, with a target of 500 BTC by the end of 2025.

This announcement comes on the heels of a 33% revenue increase for DDC in 2024, with total revenue reaching 273.3 million Chinese yuan ($37.4 million). The company's CEO, Norma Chu, highlighted the strategic importance of this move, stating that DDC is "embarking on a pioneering initiative to position DDC at the forefront of digital asset innovation with laser-focused execution on Bitcoin accumulation."

Despite the public announcement, DDC’s latest filings with the US Securities and Exchange Commission (SEC) do not explicitly mention the company’s Bitcoin holdings or the reserve strategy. However, the SEC filing does hint at the company's intentions to adopt BTC as a new asset class. The filing notes that DDC is evaluating strategies to obtain additional funding for future operations and plans to diversify revenue streams and implement cost-saving measures. It also references the crypto disclosure guidelines set by the Financial Accounting Standards Board (FASB) issued in late 2023, which allows firms to start using the new rules early if their financial reports haven’t been published yet.

DDC’s operations in mainland China and Hong Kong place it under the influence of local political, economic, and social developments. Mainland China has maintained a restrictive stance toward cryptocurrency trading and mining since 2021, when local regulators announced a major ban on crypto transactions. However, there have been speculations that China may lift its crypto ban amid growing adoption in Hong Kong and the global shift towards crypto, fueled by the crypto-friendly approach of the US administration.

Analysts have questioned mainland China’s plans to “unban Bitcoin,” noting that despite the ban, China has remained a major global player in Bitcoin mining. DDC’s move to accumulate Bitcoin reserves could be seen as a strategic response to the evolving regulatory landscape and a proactive step towards embracing digital assets as part of its financial strategy.