In a bold move that sent its stock price soaring, Semler Scientific Inc. The medical device company announced that it has committed a significant portion of its cash reserves to Bitcoin (BTC).

According to Bloomberg, the San Jose, California-based company purchased 581 Bitcoins for a total of $40 million, including fees and expenses.

Semler Scientific Transfers Cash Reserves to Bitcoin

The purchase makes Semler Scientific one of the few public companies to adopt Bitcoin as a primary treasury asset, following the example of enterprise software company MicroStrategy.

According to report and Semler Scientific CEO Eric Semler, the decision highlights the company’s belief in BTC’s potential as a “reliable store of value” and a “compelling investment.” Semler further stated:

We believe that Bitcoin has unique characteristics as a rare and finite resource that can serve as a reasonable hedge against inflation and a safe and sound haven in the face of global instability. We also believe that its digital architectural robustness makes it superior to gold, which has a market value of around 10 times that of Bitcoin.

Semler Scientific’s move to Bitcoin comes as the company seeks to optimize excess cash, which stood at $62.9 million as of March 31, 2024. The funds were previously held in interest-free bank accounts, Treasury bills and government money market funds. Semler added:

After researching various alternatives, we decided that holding Bitcoin would be the best way to exploit our excess cash. We remain committed to our core healthcare products and services, but we believe that a Bitcoin purchasing strategy can also contribute to long-term value creation for our shareholders.

BTC causes a 36% boost in the Semler Scientific share price

The report shows that the company’s move has already yielded benefits, as it did for Semler Scientific Share price on the news rose as much as 36% to $31.61, bringing its market value to about $220 million. This is in stark contrast to the nearly 50% decline in the company’s shares this year, before Bitcoin’s announcement.

Semler Scientific’s decision to allocate a significant portion of its assets to Bitcoin follows in the footsteps of MicroStrategy, which has become one of largest owners of corporations cryptocurrencies.

MicroStrategy’s Bitcoin holdings now exceed $10 billion, and the company funds purchases through cash flow, equity and debt sales.

As Semler Scientific continues to generate revenue and free cash flow from its medical products, the company says it will regularly evaluate the exploit of excess cash, including potential further investments in BTC or other “strategic initiatives.”

At the time of writing, BTC is trading at $68,100, down 2.4% in the last 24 hours.

Featured image from Shutterstock, chart from TradingView.com