Why Spanish Vanadi Coffee’s $1.1B Bitcoin Bet Will ‘Likely Fail’

Vanadi Coffee, a wrestling Spanish café chain that is active in only six locations, has turned to Bitcoin as a potential lifeline and has participated in a trend among financially tense companies in the hope of finding a solution.

Shareholders approved unanimous plans to collect up to $ 1.17 billion (EUR $ 1 billion) in the crypto, despite the installation of losing a total of $ 3.9 million last year, the company announcement Reads on Sunday.

Despite sales growth, Vanadi remains in cash, the installation of annual losses, struggling with negative operational cash flow and thin liquidity, according to facts From BME growth, a multilateral trade facility operated by the Spain Stock Exchange Group, Bolsas Y Mercados Españoles.

In any case, the coffee chain tries to ‘re -define’ his business model and to use Bitcoin as its ‘primary reserve assets, so that large quantities are collected as part of his treasury strategy’, a rough translation of his submission into Spanish lectures.

Vanadi Coffee bought 20 more BTC for $ 109,880 each, a total of 54 BTC at the end of June. The assets are held in custody with Bit2Me, a local crypto grant that is registered with the Bank of Spain.

With the change, the board may negotiate convertible debt financing in an attempt to reflect Michael Saylor’s Playbook, although without any meaningful income flow.

“Most new ‘Bitcoin Treasury Companies’ are Gimmicks, and will probably fail,” said Andrew Bailey, senior fellow at the Bitcoin Policy Institute, said Decrypt.

“Although there is scale that newcomers are privileged, a heavily run company is not a good only because it acquires healthy money.”

Directors received authorization to increase the capital by a maximum of 50% and to exclude preventive subscription rights for 20% of the new shares, provisions that can considerably dilute the interests of existing shareholders.

Vanadi Coffee pays up to 5% of committees to intermediaries, including its own board members, for capital that is supplied under its financing strategy.

‘Gimmick’ Tier

The Pivot follows a similar step of the Australian biotech company Opyl Last week, which only had $ 42,880 in cash at the end of March, turned to Bitcoin as an apparently last Treasury strategy after burning more than $ 174,200 in the quarter.

“Bitcoin has long become strange and risky for MBA types that benefit from existing financial systems,” Bailey noted. “Their thoughts remain closed for Bitcoin, I suspect, for a while longer, and the existence of small Bitcoin Treasury companies will probably not change much.”

In comparison with the strategy, which focuses on institutional fixed -interest investors with billions in assets, Vanadi represents what Bailey calls the “gimmick” dish of Bitcoin Treasury companies.

Although it is easier to “triple holdings” when starting with “only two bitcoin”, the underlying business problems are left, Bailey explained.

“Strategy, however, is different in kind of these smaller stores and stalks bigger prey: the trillions invested in products with a very liquid fixed income,” Bailey said.

Vanadi did not return immediately Decrypts Request for comments.

Edited by Sebastian Sinclair