Stack BTC, a bitcoin treasury company advertised by Nigel Farage, has lost more than 15% of its asset value since launching in March, a £565,000 fall. Finance experts used the slump to warn investors against firms that simply stockpile bitcoin, and against trusting products fronted by public figures.
A bitcoin treasury company that Nigel Farage has advertised has lost more than 15% of its asset value, prompting finance experts to warn investors away from firms built purely on holding the cryptocurrency. The Reform UK leader has invested £215,000 in the firm, named Stack BTC, which buys bitcoin on behalf of shareholders and aims to acquire other companies with the gains.
A 15.48% fall since March
The company's investments have fallen 15.48% since its launch in March this year, a loss of £565,000. A Reform spokesperson said Farage did not have a brand-ambassador role at Stack BTC but had simply bought shares. However, he appeared in a promotional video earlier this year that showed him spending £2m of the company's money on bitcoin.
Farage is the second largest shareholder, owning 5.61% of the stock behind Paul Withers on 20.72%. The two are the only holders with the 5% needed for voting rights, while former chancellor Kwasi Kwarteng, the executive chair, owns 3.55%.
Experts warn on treasury firms
Susannah Streeter, chief investment strategist at Wealth Club, said companies that simply stack up bitcoin holdings have no diversification cushion when prices turn. She cautioned that a familiar name fronting a product can lend it a legitimacy the underlying asset does not deserve.
Peter Schiff, the stockbroker who predicted the 2008 financial crash, advised against investing in any bitcoin treasury company. Dan Coatsworth, head of markets at AJ Bell, noted that Stack BTC has changed its name multiple times, which he called a possible red flag.
Scrutiny beyond the market
The slump feeds wider scrutiny of Farage's crypto ties. He is facing a standards probe for failing to declare a £5m gift from crypto billionaire Christopher Harborne, and a Labour MP has separately reported him to the commissioner over alleged lobbying of the Bank of England governor. Stack BTC declined to comment.
Sources: The Guardian, The Guardian
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