v3.26.1
Fair Value of Financial Instruments
 6 Months Ended
Jun. 30, 2026
Fair Value of Financial Instruments [Abstract]  
Fair Value of Financial Instruments

Note 3 – Fair Value of Financial Instruments

 

ASC 820, Fair Value Measurements states that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The three-tiered fair value hierarchy, which prioritizes which inputs should be used in measuring fair value, is comprised of: (Level I) observable inputs such as quoted prices in active markets; (Level II) inputs other than quoted prices in active markets that are observable either directly or indirectly and (Level III) unobservable inputs for which there is little or no market data. The fair value hierarchy requires the use of observable market data when available in determining fair value. The Company’s assets and liabilities that were measured at fair value on a recurring basis were as follows (in millions):

 

    June 30, 2026 (unaudited)     December 31, 2025  
    Fair Value     Level I     Level II     Level III     Fair Value     Level I     Level II     Level III  
Digital assets – non current     451       451       —       —       663       663       —       —  
Total   $ 451     $ 451     $ —     $ —     $ 663     $ 663     $ —     $ —  

 

As of June 30, 2026, the Company held 7,500 units of Bitcoin, at cost of $842 million, which were classified as non-current assets. These Bitcoins were originally held by Pallas and continued to be held following the Company’s acquisition of Pallas. During the six months ended June 30, 2026, the Company acquired approximately 1.08 units of Bitcoin, at cost of $100,000 for short-term trading purposes. During the same period, the Company disposed of all such Bitcoin for cash proceeds of US$71,201, recognized a realized loss of US$28,799 on the sale, and held no Bitcoin acquired for short-term trading purposes as of June 30, 2026.

 

In accordance with ASU 2023-08, Intangibles—Goodwill and Other—Crypto Assets, the Company accounts for its crypto assets as indefinite-lived intangible assets measured at fair value, with changes in fair value recognized in net income in each reporting period.

 

The fair value of Bitcoin is determined based on quoted prices in active markets. The Company does not apply amortization to digital assets. Gains and losses resulting from changes in fair value are presented within “Other (expenses) income” in the unaudited interim condensed consolidated statements of operations.

 

As of June 30, 2026, the fair value of the Company’s Bitcoin holdings was approximately $451 million. For the three and six months ended June 30, 2026, the Company recognized a net loss of approximately $49 million and $212 million, respectively, in the unaudited interim condensed consolidated statements of operations related to changes in the fair value of its Bitcoin holdings. For the six months ended June 30, 2025, the Company did not recognize any net loss in the unaudited interim condensed consolidated statements of operations related to changes in the fair value of its Bitcoin holdings.