FT: Shares in bitcoin hoarders sink as ‘crypto treasury’ mania sours

Key topics:Shares in bitcoin-hoarding firms plunge amid market overcrowding fearsSome companies now trade below value of crypto they holdNew crypto treasury launches continue despite sell-offs and risks.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up for the BizNews channel here..By Nikou Asgari in London.Shares in bitcoin-hoarding companies have tumbled in recent weeks as investors grow increasingly concerned about an overcrowded market, in the first major setback for the “crypto treasury” craze that has swept financial markets this summer.Strategy, the world’s biggest corporate bitcoin holder, has fallen 18 per cent over the past month to its lowest level since April, dragging down shares in a slew of groups that have aped founder Michael Saylor’s use of a public company to stockpile cryptocurrencies.Companies across the world this summer rushed to raise debt and equity to buy bitcoin and other tokens such as ether, solana and XRP in an effort to boost their company valuations, enthused by US government support for the crypto industry. Led by Strategy, many groups’ share prices soared to well above the value of the tokens they held, in a sign of investors’ belief in this business model.Following the recent declines, however, some are now trading below the value of the crypto they hold, in a worrying sign for a strategy that relies on an upward spiral of token and share prices..Read more:.The Trump crypto empire: Influence, risk, and a $14.9bn bet: Lionel Laurent.“This whole thing is starting to show big cracks,” said Eric Benoist, tech and data research specialist at Natixis CIB. “Some companies are not going to make it through” if their share prices continued to fall, he said, adding that after the summer rush to list and buy tokens, “the weaker players are going to be basically wiped out by the market, most likely”..The shares of Japanese hotelier-turned-bitcoin hoarder Metaplanet, Asia’s biggest bitcoin holder, have dropped 68 per cent from their peak in mid-June, while those of Smarter Web Company, the UK’s biggest bitcoin buyer, are down 70 per cent over the same period.“It got a bit crazy,” said Geoff Kendrick, global head of digital asset research at Standard Chartered. “We had a massive rush, there’s a lot of them now,” and investors are “taking out a bit of the froth”, he said.The crypto-buying strategy largely relies on issuing shares or raising debt to buy bitcoin and other tokens, hoping that this fuels share price growth. Last year, Strategy’s shares rose from about $60 to a peak of more than $500. They currently trade at about $326.Raising capital becomes harder to do as company valuations fall, however. Benoist said selling new shares to pay bondholders in particular “is not healthy by any means and I think people are realising that”..This summer, scores of executives sought to emulate Saylor’s Strategy, with some changing their company names to be more bitcoin-aligned and updating their branding to match the token’s orange colour.Some have sidelined their original business models to focus on buying crypto. Shares in two such groups, US-listed healthcare service company KindlyMD and French tech firm-turned-bitcoin buyer Capital B, have plummeted 68 per cent and 26 per cent respectively over the past month.Others are vehicles that listed on stock exchanges this summer with the sole aim of raising money to buy tokens. US President Donald Trump has supported the crypto industry and his family business, Trump Media & Technology Group, has raised billions of dollars to spend on buying tokens. Shares in Alt5 Sigma, a company with which the Trump family set up a crypto treasury last month, have dropped 35 per cent since the deal was announced.Investors are focused on a company’s so-called mNAV — a metric created by Saylor — which is a ratio of its enterprise value (the sum of a company’s equity and debt, minus cash) to its crypto holdings. If a company’s shares fall so much that it becomes valued less than the tokens it holds, it enters “a danger zone”, Benoist said.Some companies have already reached this stage. US-listed bitcoin miner LM Funding America has an enterprise value of $23.5mn, according to Financial Times calculations, after its share price halved over the past month, even though its holdings of bitcoin are worth about $34mn.Healthcare technology company Semler Scientific has an enterprise value of $500mn, while its bitcoin holdings are worth about $557mn.“If you get to that danger zone it’s going to be potentially very difficult to rebound from it,” Benoist said, adding that larger companies will probably buy smaller ones to acquire their tokens at a discount.Despite the recent sell-off, new vehicles are still being launched. On Tuesday, design manufacturing group Forward Industries raised $1.65bn to launch a solana treasury strategy. Packaging company Eightco Holdings loaded up on Worldcoin tokens on Monday, sending its shares soaring.The recent sell-off comes as the price of bitcoin has fallen 9 per cent from its peak of more than $124,000 last month, as investors broadly sell risky assets. This year, about $73bn has been raised by companies buying bitcoin and about $38bn raised to buy ether, according to crypto advisory firm Architect Partners.The market “got irrationally overheated”, said Tyler Evans, co-founder of investment firm UTXO Management, which is 95 per cent invested in crypto treasury companies.“The hype is dying down . . . [This summer] was the peak for both hype and for the number of companies launching,” said Evans, who is a board member of several such companies..© 2025 The Financial Times Ltd.

FT: Shares in bitcoin hoarders sink as ‘crypto treasury’ mania sours

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