Telegram: Colossal losses despite $400 million in crypto

Financial transparency is increasingly important for tech companies. Telegram just released its 2023 financial report, revealing that the firm has hundreds of millions of dollars in crypto. The announcement comes as the messaging app, already under pressure for its ties to the crypto world, is dealing with the fallout from the arrest of its CEO, Pavel DUROV.

Telegram and digital assets: a strategic diversification?

Telegram’s 2023 financial report reveals a bold diversification strategy with $400 million in digital assets held at the end of the year. “We saw an opportunity in crypto to strengthen our business model and offer additional services to our users,” the report reads. The company mentioned that nearly 40% of its revenue, or about $137 million, came from crypto-related activities, split between an “in-app wallet” and the “sale of collectibles.”

Despite this diversification strategy, Telegram suffered an operating loss of $108 million in 2023. This loss, coupled with revenue of $342.5 million, raises questions about the long-term viability of its crypto-based strategy. However, the company saw an increase in its premium users, from four million to five million, which potentially offset its operating losses. The report detailed also the ways in which Telegram leverages its built-in wallet to facilitate crypto transactions and the sale of collectibles, which include digital items such as usernames and virtual phone numbers.

Listed companies are increasingly betting on cryptos

Cryptocurrencies are increasingly gaining ground in the portfolios of publicly traded companies as they are now considered a strategic reserve asset. In just one year, the value of these large companies’ Bitcoin assets has seen a spectacular jump from $7.2 billion to $20 billion, an increase of almost 200%.

A Nickel Digital survey found that 75% of institutional investors believe public companies should include Bitcoin on their balance sheets, and 26% support its use as a reserve asset. With only 1.6% of the total Bitcoin supply held by these companies, the growth potential remains immense.

While only a small fraction of Bitcoin’s total supply is held by publicly traded companies, the growth potential remains immense and points to a future where crypto could play an even more central role in corporate financial strategies. Telegram embodies this transformation, but will need to address its current challenges in the short term, including the arrest of its CEO, and prove the viability of its model in the face of market uncertainty and regulatory pressures in the long term.