Semler Scientific Doubles Down on Bitcoin Despite Hedge Fund Skepticism

Eric Semler, chairman of Semler Scientific Inc., has expressed skepticism among hedge funds regarding Bitcoin's long-term viability beyond the Trump administration. Semler believes that traditional finance views Bitcoin as a fleeting trend that may not survive political transitions. He stated, "I think that they think it is a fly-by-night concept and that it is probably going to, after the Trump administration, go back down a lot."

Despite this skepticism, Semler Scientific has taken a bold stance by adopting a Bitcoin treasury strategy. The company currently holds 4,449 BTC and plans to increase this to 105,000 BTC within two and a half years, with a target of 10,000 BTC by the end of the year. Semler views the institutional doubt as an opportunity, stating, "When you’re making a bet on something that the majority doesn’t believe in, and you’re right, you make so much more money."

Semler's perspective is that the negativity surrounding Bitcoin presents a unique investment opportunity. He considers himself a contrarian investor, noting that his most profitable investments have come when others were dismissive. "Those are the types of investments that have the highest returns," he said.

While some hedge fund managers remain hesitant, the broader trend indicates increasing crypto exposure. A 2024 survey by the Alternative Investment Management Association and PwC showed that 47% of hedge fund managers now hold some level of crypto exposure, up from 29% in 2023 and 37% in 2022. Looking further back, a 2021 Intertrust Global survey of hedge fund CFOs showed that nearly all expected to allocate 7.2% of their portfolios to crypto by 2026.

VanEck’s head of digital asset research, Matthew Sigel, recently raised concerns about the Bitcoin treasury strategies used by certain public companies. He suggested that continued accumulation of BTC could soon harm shareholders more than help. Sigel specifically criticized the use of at-the-market (ATM) share issuance programs, warning that they can become dilutive when stock prices approach the company’s Bitcoin net asset value (NAV).

Sigel proposed several measures to prevent value erosion, including pausing ATM programs if a company’s stock trades below 0.95x NAV for over 10 days. He drew comparisons to past failures in the crypto mining sector, where excessive dilution and executive pay led to major shareholder losses. As an example, he cited Semler Scientific, a medical tech firm that entered the BTC space in 2024. Despite acquiring 3,808 BTC, its stock has fallen over 45%, and its mNAV has dropped to 0.82x.