Nano Labs Invests $50 Million in BNB Amid Hardware Revenue Drop

Nano Labs, a prominent microchip firm, has made a significant move in the cryptocurrency market by acquiring $50 million worth of Binance Coin (BNB). This purchase is part of the company's ambitious plan to hold up to 10% of the total circulating supply of BNB, marking a substantial investment in the cryptocurrency. The acquisition brings Nano Labs' total holdings in BNB and Bitcoin (BTC) to approximately $160 million. The company, founded in 2019 by Kong Jianping and Sun Qifeng, aims to purchase up to $1 billion worth of BNB, with a long-term goal of holding between 5% and 10% of the total circulating supply.

The recent acquisition of BNB tokens was made at an average price of $672.45 per token, reflecting a strategic shift in Nano Labs' business focus. The company, which primarily produces high-throughput and high-performance computing chips, has been facing challenges in its hardware business. In the second half of 2024, Nano Labs' revenue dropped by 39% to $2.2 billion, highlighting the need for diversification and new revenue streams. The decision to invest in BNB is part of a broader strategy to allocate up to $1 billion to the cryptocurrency. The funds for this initiative are partly sourced from $500 million in convertible notes issued by the company. This move is seen as a strategic pivot from its struggling hardware business, aiming to capitalize on the growing interest in cryptocurrencies and blockchain technology.

The acquisition of BNB tokens is not only a financial investment but also a strategic move to support the BNB Chain ecosystem. A spokesperson for BNB Chain welcomed the growing institutional interest in BNB, stating that they recognize the organic adoption that supports BNB and the sustainable growth of their ecosystem. This investment by Nano Labs is expected to contribute to the overall stability and growth of the BNB Chain, which has a market cap of $93.4 billion and a circulating supply of 145,887,575 tokens.

However, the reaction from investors to Nano Labs' BNB acquisition has been mixed. Although the company's share price rose by over 106% when it first announced its plan to issue $500 million of convertible notes to fund a BNB treasury, the latest purchase did not impress investors. Following the acquisition, Nano Labs' stock price dropped by more than 4.7% during the regular trading session and a further 2% after the bell, trading at $8.21. This decline in stock price suggests that investors may be skeptical about the long-term benefits of holding BNB as part of the company's treasury strategy.

Despite the initial market reaction, Nano Labs remains committed to its long-term goal of holding a significant portion of the total circulating supply of BNB. The company's strategic shift towards cryptocurrency investments reflects a broader trend among companies opting to hold crypto for treasuries. However, some analysts have expressed skepticism about the long-term viability of this trend. They believe that investors may question the rationale of investing in a company that holds a valuable asset when they could just buy it themselves.

In conclusion, Nano Labs' acquisition of $50 million in BNB marks a significant step in its strategic pivot towards cryptocurrency investments. While the initial market reaction has been mixed, the company's long-term goal of holding up to 10% of the total circulating supply of BNB reflects a growing institutional interest in the cryptocurrency. As Nano Labs continues to execute its BNB treasury strategy, it will be important to monitor the company's progress and the broader market's response to this innovative approach to corporate treasury management.