Sequans transfers $111M in Bitcoin to Coinbase

Sequans Communications’ Bitcoin treasury firm has transferred 970 BTC, worth approximately $111 million, to Coinbase, based on on-chain data.

This marks the first outbound transaction since the firm began accumulating Bitcoin, sparking speculations on whether there is an impending sale or a custody reorganization. 

The Nasdaq-listed semiconductor and BTC treasury firm now holds roughly 2,264 BTC, worth around $255 million at the current price. The Sequan stock has shed approximately 27% since it initiated its Bitcoin treasury strategy, reflecting a growing investor lack of confidence in the risk implications associated with Bitcoin exposure.

Sequans’ stock drops roughly 60% YoY

Sequans Communications, which manufactures 5G/4G IoT semiconductor devices, initiated its Bitcoin treasury strategy in early July through a strategic investment valued at $384 million. According to a Cryptopolitan report, the company raised capital through private placement offerings of debt and equity. The SQNS stock rallied over 27% after the announcement, following the growing trend of institutional accumulation of BTC as a hedge against balance sheet risks.

Based on blockchain analytics data from Arkham Intelligence, Sequans has made its first significant outbound transaction since the beginning of BTC accumulation in July. The 970 BTC transferred earlier this week was directed to the Coinbase exchange, signaling a selling activity. The move has prompted speculations that Sequans could be preparing to liquidate part of its holdings or instead for an operational or custody reorganization strategy. 

Coinbase Prime account provides institutional custody and over-the-counter (OTC) trading services designed to minimize market impact. At the time of publication, Bitcoin had maintained a moderate price action with a 1% drop over the past 24 hours. BTC was trading at $112,80.96, with an 11% increase in its average 24-hour trading volume, which reached $65.6 billion. Market reaction so far suggests that the price action hasn’t been triggered much. 

Sequans’ Bitcoin treasury strategy was intended to provide exposure to BTC as a balance sheet diversification strategy, similar to that of MicroStrategy, Tesla, and Block. The model, however, has drawn skepticism from investors who are wary of the volatile nature and uncertainty surrounding the crypto ecosystem. These events have triggered a sustained decline of roughly 60% in Sequans’ stock since the launch of its Bitcoin treasury strategy in July.

In July, the stock jumped to around $53 but immediately began a sustained decline to its current price of $7.83, representing a 61.9% drop over the past six months and an 18% drop over the past month. The sustained stock downtrend has reflected a market caution toward publicly listed firms that hold volatile digital assets. 

Corporate Bitcoin treasuries hit 4.05M BTC amid Sequans asset movements

The IoT semiconductor manufacturer launched a 10% share buyback program in late September, authorizing the purchase of up to 1.57 million American Depositary Shares. Despite its stock downtrend, the buyback was intended to signal balance sheet confidence in its Bitcoin treasury strategy and long-term commitment to value creation. 

The transfer of BTC to Coinbase coincided with the exchange’s third-quarter earnings results. Coinbase reported strong results in Q3, with its revenue jumping 44% year over year to $1.79 billion and its trading volume rising to $299 billion. The institutional adoption of crypto assets has fueled growth, driving the exchange’s revenue higher. Subscription and service fees, including custody fees, grew to $712 million. 

Sequan’s move could be interpreted as a shift towards Coinbase’s custody, which, based on DebutInfoTech analysis, has attracted roughly 15% of the institutional client base holding Bitcoin due to its custodial security and compliance support. Despite the growth in institutional flow towards Coinbase custody service, the exchange faces scrutiny over fee compression and regulatory challenges under the U.S. Securities and Exchange Commission and MiCA frameworks. 

So far, Strategy is the top Bitcoin treasury firm with 640,808 BTC holdings based on on-chain data, leaving Sequans at the 32nd position with 2,264 BTC holdings. Total BTC held by treasury firms stands at 4.05 million, representing 5.73% of the total supply.

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