Insurance Provider Lemonade (LMND) Discloses Bitcoin Holding on Balance Sheet


Millennial-oriented Insurance provider Lemonade unveiled in its filing with the Securities and Exchange Commission (SEC) that it purchased $1 million worth of Bitcoin in June 2021. In June, Bitcoin price traded between $30k and $40k.

This disclosure was part of the company announcing its merger with car insurance company Metromile. According to the SEC filing, Metromile has unaudited crypto assets as part of its financial statements.

In May, Metromile had said that it would soon implement a Bitcoin payment solution on its platform for eligible insurance claims and that it would purchase additional Bitcoin.

At the time, Metromile CEO Dan Preston said they believed in the “transformative potential of blockchain technology” and that offering Bitcoin as an option for insurance premiums or claims payments is the first step to using crypto for enduring advantages in the insurance industry.

According to the regulatory filing, Bitcoin is their only investment, which is being stored with a third-party custody provider.

“The digital assets are initially recorded at cost and are subsequently re-measured on the consolidated balance sheets at cost, net of any impairment losses incurred since acquisition,” it said.

During the Q3, the company recorded an impairment loss of $0.1 million, and for the nine months ended Sept. 30, 2021, the impairment loss on Bitcoin was $0.2 million.

By the end of Q3 of 2021, the company hadn’t sold its Bitcoin holdings; as such, there was no realized gain or losses.

As of September 2021, the carrying value of the company’s bitcoin held was $0.8 million, while the fair market value of bitcoin held as of September 30, 2021, was $1.2 million.

As of writing, Bitcoin is trading around $48,000, down 30% from its all-time high of $69,000 early last month. BTC is down more than 15% in December but still up 10.30% in Q4 while recording 67% gains YTD, as per Skew.

The shares of Lemonade (NYSE: LMND), on the other hand, are trading at $41.28, on a decline since January when it hit $188.

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