Chinese electric vehicle company Jiuzi New Energy "exchanges shares for coins," planning to use $1 billion worth of equity to acquire 10,000 Bitcoins

Chinese electric vehicle company Jiuzi Holdings (NASDAQ: JZXN) recently announced that it will acquire 10,000 Bitcoins from a digital asset investor through an equity transaction, valued at approximately $1 billion, to expand the company’s digital asset reserves. However, amid recent declines in the crypto market and emerging corporate financial risks, the sustainability of the DAT model has once again been questioned.

Jiuzi Holdings Converts Equity into Cryptocurrency: $1 Billion Equity Purchase for 10,000 Bitcoins

Electric vehicle charging infrastructure provider Jiuzi Holdings stated in an announcement that it has reached a strategic agreement with a globally renowned digital asset investment firm to acquire 10,000 Bitcoins held by the partner, using equity valued at about $1 billion. This transaction will be completed through an equity swap, meaning the investor will become a shareholder and their Bitcoins will be added to the company’s balance sheet.

Management noted that this plan is not only an asset allocation decision but also an important step in expanding its digital asset strategy: “Holding a large amount of Bitcoin is expected to enhance the flexibility and cyclical resilience of our balance sheet. By establishing a highly liquid Bitcoin reserve, we aim to strengthen capital management and improve capital efficiency amid the rapid development of the global digital asset market.”

Additionally, both parties plan to collaborate more broadly in the crypto finance sector, including digital asset management, cross-border crypto payment settlements, liquidity management, and ecosystem cooperation. The company believes that partnering with a digital asset institution with global market resources will help it participate in the rapidly evolving crypto financial infrastructure.

Can the DAT Flywheel Keep Turning? The Double-Edged Sword of Bitcoin Reserves for Corporations

Last year, the strategy of including Bitcoin on corporate balance sheets—known as the Digital Asset Treasury (DAT)—began to gain global traction. Some companies used it to attract market attention and boost valuations. However, this model also carries financial risks associated with price volatility.

Since Bitcoin’s peak of around $126,000 last year, its price has fallen by about 20% this year. Companies holding large amounts of Bitcoin and Ethereum are facing asset value fluctuations and capital market funding pressures. Many DAT companies have recently started to sell off cryptocurrencies to cash out.

This highlights the double-edged nature of DAT: during bullish markets, it can generate premiums, but when asset prices decline, heavy reliance on a single asset can become a significant financial burden. It also reflects the need for companies to balance long-term asset reserves with short-term shareholder interests amid market uncertainty.

(Unable to withstand MSTR’s continuous decline and Bitcoin’s sharp drop, MicroStrategy increases STRC preferred stock dividend to 11.5%)

JZXN Stock Surges 87% in a Day, Speculation and Manipulation Coexist

Following the announcement, JZXN’s stock price surged over 87% in a single day, reminiscent of last summer’s crypto frenzy. However, such rapid gains are often driven by speculation and manipulation.

Investors are reminded that investing in DAT-related stocks is not equivalent to directly holding cryptocurrencies. Their stock performance remains highly dependent on company fundamentals, capital operations, and market sentiment. As the crypto market enters a new cycle, the success of many companies’ DAT transformation strategies remains uncertain. Most will likely be tested by time and market conditions.

This article about Chinese electric vehicle company Jiuzi Holdings “exchanging equity for Bitcoin,” planning to use $1 billion in equity to acquire 10,000 Bitcoins, first appeared on Chain News ABMedia.