The corporate rush into digital currencies that swept through markets earlier this year is losing steam. More than 200 companies pivoted to a crypto-treasury strategy, stockpiling bitcoin and other tokens to boost their valuations. But in September, corporate bitcoin purchases fell to their lowest pace since April, signalling that the once red-hot trend is cooling. Many of the firms that jumped in are now facing stock declines and investor scepticism, the Wall Street Journal reported.
Market oversupply weighs on shares
A quarter of publicly listed crypto-treasury companies are trading below the value of their token holdings, according to K33 Research. Some stocks have lost more than 50 percent of their value since announcing their pivots. Analysts say the flood of private stock sales to finance crypto purchases left the market oversaturated. Without investor appetite to absorb more supply, smaller companies have struggled to raise funds for additional token purchases.
The Trump effect and its limits
The craze took off after President Trump voiced strong support for the digital-asset industry, sparking a wave of corporate conversions. Firms from biotechnology to farming equipment abandoned their traditional focus in favour of crypto holdings. Initially, the strategy boosted valuations as investors rewarded bold moves into bitcoin. But the trend’s rapid spread created too many imitators chasing the same playbook at the same time, straining capital markets.
Struggles for pioneers and copycats
Even Strategy—formerly MicroStrategy, which pioneered the bitcoin treasury model—has seen its stock price decline 20 percent in the third quarter. Once trading at more than three times the value of its bitcoin holdings, the company’s shares now hover at 1.5 times that figure. Copycat companies have fared even worse, with some unable to sustain valuations above the value of their token reserves, limiting their ability to issue new shares and buy more crypto.
Mergers as a survival strategy
A wave of consolidation may be the next chapter. Last week, asset manager Strive, co-founded by Vivek Ramaswamy, struck a deal to acquire Semler Scientific, a former medical-equipment firm that pivoted to bitcoin in 2024. The merger will give the combined company control of more than 10,900 bitcoin, a scale that analysts say could attract investors willing to pay a premium. Bankers expect more deals between large, well-capitalized players and struggling smaller firms.
Risks of a downturn
Despite continued interest, the model carries clear risks. If crypto prices fall sharply, companies relying on token holdings could be forced to sell assets to cover costs, deepening a potential selloff. Bitcoin rose 6 percent in the last quarter, but ether surged 68 percent, driving attention to alternative tokens like solana and AVAX that can be staked for returns. Yet the proliferation of firms hoarding everything from blue-chip cryptocurrencies to meme tokens has raised doubts about whether the strategy is sustainable.
A cooling market with uncertain future
Industry insiders warn that the crypto-treasury boom may already have peaked. Gracy Chen, chief executive of Bitget, said she has rejected proposals to launch new treasury firms tied to her exchange’s token, citing oversaturation. Investors are now more selective, favouring larger players with established management teams and substantial crypto reserves. Whether the trend stabilizes or unravels will depend on crypto prices and the ability of companies to survive beyond their token bets.
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