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Mint
3 days ago
- Business
- Mint
The hottest business strategy this summer is buying crypto
It's the hottest trade of the summer. Companies are raising tens of billions of dollars, not to invest in their businesses or hire employees, but to purchase bitcoin and more obscure cryptocurrencies. A Japanese hotel operator, a French semiconductor manufacturer, a Florida toy maker, a nail-salon chain, an electric-bike maker—they're all plowing cash into tokens, helping to send all kinds of digital currencies to record levels. News that a new company plans to buy crypto is enough to send its shares flying—spurring others to consider joining the frenzy. Since June 1, 98 companies have announced plans to raise over $43 billion to buy bitcoin and other cryptocurrencies, according to Architect Partners, a crypto advisory firm. Nearly $86 billion has been raised for this purpose since the start of the year. That's more than double the amount of money raised in initial public offerings in the U.S. in 2025, according to Dealogic. Skeptics say the rush of companies buying crypto is a sign the market is overheating, noting that digital tokens, especially the obscure ones, are notoriously volatile and have uncertain futures. They scratch their heads about why an investor would buy shares of a company purchasing cryptocurrencies when they can buy them on their own through low-cost exchange-traded funds and other vehicles. Others note that many of these companies are worth much more than the cryptocurrencies they hold, as if investors are willing to pay $2 for a $1 bill. That hasn't stopped big-name bankers, investors and others from jumping in. Mutual-fund giant Capital Group, hedge fund D1 Capital Partners and investment bank Cantor Fitzgerald are among those backing recent efforts by companies to raise huge sums to purchase cryptocurrencies. Venture capitalist Peter Thiel's Founders Fund, Mike Novogratz's Galaxy Digital and other investors backed a move by a company called Bitmine Immersion Technologies to raise $250 million to buy ether. The company, worth $26 million on June 27, the Friday before its announcement, is now worth over $2 billion after a surge of more than 800%. Thiel, the tech billionaire known for starting PayPal and Palantir, holds a 9.1% stake in the company, according to a recent filing. He declined to comment. 'If you blink, you miss a couple of these deals," said Bob Diamond, the former Barclays chief executive. He should know. Last week, an investment firm Diamond co-founded called Atlas Merchant Capital said it was working with Paradigm, D1, Galaxy, 683 Capital and other big investors to form an entity that will spend $305 million to buy a seven-month-old crypto token called Hype. Diamond will be chairman of the new entity, while Eric Rosengren, the former president of the Boston Fed, is expected to be on its board of directors. 'We think Hype is pretty special," Diamond says. The new entrants are following in the footsteps of the company once known as MicroStrategy, whose CEO, Michael Saylor, pioneered the so-called crypto-treasury strategy in 2020. Now known simply as Strategy, it has spent years selling shares and debt to buy bitcoin. It is now worth over $115 billion, up 153% in the past year and 3,371% in the past five years. Saylor has long implored other companies to buy bitcoin with their excess cash. Most everyone ignored or scoffed at the notion. Using spare cash or raising money to buy volatile cryptocurrencies seemed a dicey proposition. Executives who run companies that sell products and services weren't supposed to speculate on bitcoin. As of last August, just a handful of companies were using their cash to buy any crypto. That all changed this year. President Trump has embraced crypto, vowing to make America the 'crypto capital of the planet." He has installed crypto-friendly cabinet members and Congress has advanced legislation that could make cryptocurrencies part of the mainstream financial system. Trump Media and Technology Group, the social-media firm controlled by the president's family, has also bought about $2 billion worth of bitcoin and related securities as part of its treasury strategy. Lately, companies have been taking things further than even Saylor suggested—buying overlooked or unknown digital currencies, not to diversify their holdings but to make outright wagers on risky tokens. Even Saylor is unsure that's a wise move. 'Applying a treasury strategy to other crypto assets introduces a different—and often speculative—risk profile," Saylor said in an email. 'I haven't seen a compelling rationale for doing so." Some bears are wading into the frenzy, including well-known short seller Jim Chanos, to bet against some of these companies. 'In my three decades experience I have never witnessed a period where investors are willing to pay such large premiums for assets they can readily purchase on their own," says Michael O'Rourke, chief market strategist at JonesTrading. Big companies, including tech giants Meta and Microsoft, have resisted the idea, as have their investors. Shareholder proposals at both companies sought to add bitcoin to their balance sheets at recent annual meetings, but were overwhelmingly voted down. Meta and Microsoft's boards of directors recommended voting against the proposals to invest in bitcoin. The companies that are taking the plunge are being transparent about their plans to raise cash and put it all in crypto. They argue that they can do things an ETF cannot, such as 'stake" tokens, or lock them up for a specified amount of time to earn a return. The companies can also borrow money to buy additional cryptocurrencies, something ETFs also can't do. Cryptocurrencies are volatile even in the best of times. If the price of a token plunges after a company has bet the farm, it could be left holding a worthless asset. Staking amplifies the risk, since it means an investor can't touch the locked-up tokens if they start to fall in value. And then there's the risk that investors sour on the strategy. Last week, Volcon, an electric-bike maker based in Austin, Texas, raised $500 million in just seven days to initiate its bitcoin treasury strategy, according to co-CEO Ryan Lane. Shares of Volcon jumped from $9.22 to more than $44 on the day of its announcement as speculators rushed to snap up the stock. Shares have fallen every day since, closing Friday at $13.40. Two weeks ago, French semiconductor manufacturer Sequans Communications raised $384 million from more than 40 institutional investors to buy bitcoin. The company's stock jumped 215% that week and peaked at $5.83 a share—but it's since fallen back down to $1.98. 'What happens in six, 12 or 18 months from now and instead of the current bull market, we have a bear market?" said Evgeny Gaevoy, the co-founder of crypto market-making firm Wintermute. 'A lot of low-effort crypto treasury companies will potentially crash and burn. And a lot of the retail investors that predominantly invested in them will be affected." Executives of some of the companies aren't waiting to see if their plans work out—they're dumping their personal shares after making the announcements, pocketing millions in the process. On June 16, for example, SRM Entertainment, a toy-and-souvenir manufacturer in Winter Park, Fla., with a market value of $25 million the Friday before, announced plans to spend $100 million on a cryptocurrency called Tron. The token purchase is part of a reverse merger between SRM and crypto entrepreneur Justin Sun's company, also called Tron. SRM's stock, which traded between 28 cents and $1.45 a share all year, shot up past $9. Over the next several days, the company's CEO, Richard Miller, and its chief financial officer, Douglas McKinnon, exercised previously issued stock options to buy a combined 600,000 shares at 56 cents a share, according to data from The Washington Service. They sold a combined $2 million or so of the newly acquired shares. A vice president of the company sold $941,000 worth of stock. Executives of the company, which has changed its name to Tron Inc. and rang the Nasdaq opening bell on Thursday, declined to comment. Lately, tiny companies are working with recognized names in finance to raise cash to buy crypto. Among them is Cantor Fitzgerald, run by Howard Lutnick before he became commerce secretary this year and passed the reins to his sons Brandon and Kyle Lutnick. Cantor last week said it would form a $5.3 billion bitcoin treasury company with Adam Back, an early cryptographer. It was Cantor's second multibillion-dollar crypto-treasury SPAC deal in less than three months. The firm also facilitated several other bitcoin treasury deals and acted as an adviser to Trump Media's plan to buy bitcoin. For now, many investors are scoring big profits betting on these deals, which remind some of the frenzied SPAC boom of the pandemic era, when established members of the financial world jumped on the wave. Fabio Giorno, an entrepreneur who operates a tutoring business in Toronto, says he has begun to invest in Bitmine and SharpLink Gaming, another ether-focused treasury stock. He's done well on the stocks, but says the volatility of the shares shakes him. 'Sometimes it's a little risky when you walk away from your computer, because you never know what's going to happen with the news," he said. Write to Gregory Zuckerman at and Vicky Ge Huang at
CNBC
08-07-2025
- Business
- CNBC
Architect Partners: Q2 best quarter ever for crypto M&A activity
Elliot Chun with Architect Partners breaks down the findings of the firm's Q2 2025 Crypto M&A and Financing Report.
Mint
09-06-2025
- Business
- Mint
Businesses are bingeing on crypto, dialing up the market's risks
Buying bitcoin is becoming a fad for a growing list of companies that have nothing to do with crypto but believe digital assets can boost their stocks. The problem, some industry insiders say: This could expose crypto to new risks, amplifying selloffs in moments of turbulence. The approach has been pioneered by executives such as bitcoin evangelist Michael Saylor, who has turned his software company Strategy into a warehouse for the digital currency. Other companies are following suit. About 60 companies with no previous ties to the market are now pursuing the 'bitcoin treasury strategy," according to Standard Chartered Bank, citing data from They make software, and offer marketing and healthcare services. Some aren't just buying bitcoin, but are piling into smaller tokens such as ether, solana and XRP. Some industry players argue these companies are courting disaster. For one, they say, digital assets have a history of volatility. If the price of bitcoin or another crypto token were to fall sharply, the selloff might also pull down the value of a company's stock. More troubling, though, is that a steep decline might also compel companies to sell their tokens—accelerating the selloff—especially if they borrowed heavily to acquire their crypto in the first place. For students of financial history, it is a familiar refrain. 'We haven't seen this type of capital activity in any crypto-related strategy within this short amount of time potentially in the history of our industry," said Elliot Chun, a partner at advisory firm Architect Partners. 'We just have to be careful because it is great on the way up, but when it is on the way down, it's going to be violent." These purchases (or, for many, the mere announcement of these plans) often send the companies' share prices flying. At least half a dozen companies laid out their crypto treasury plans last week alone. And with bitcoin trading near its record high and President Trump's emergence as one of the crypto industry's staunchest supporters, the numbers should continue to grow, bankers and analysts say. All of this newfound interest in loading up on crypto has Wall Street's attention, with bankers now racing to help finance companies' purchases of tokens. On June 2, a sports-betting marketing company called SharpLink Gaming said it had closed a $425 million private placement led by blockchain company Consensys Software, to become the largest public corporate holder of ether. The announcement, however, sent shares of Nasdaq-listed SharpLink, which is based in Minneapolis, down 28%. The next day, a Canadian renewable-energy company called SolarBank fared better. Its stock closed up more than 1% after announcing its bitcoin treasury strategy. Then, on Wednesday, shares of K-pop media firm K Wave Media surged more than 130% after the company revealed plans to sell up to $500 million worth of stock to acquire bitcoin. Last week's announcements bring the total capital intended for the crypto treasury strategy to about $11.3 billion since the start of April, according to data from Architect Partners. That includes the plans by President Trump's media company to raise $2.5 billion from investors to buy bitcoin and the debut of Twenty One Capital—a bitcoin-accumulation company backed by Tether and SoftBank. Trump Media and Technology Group, the social-media firm controlled by the president's family, said last week it sold more than $1.4 billion worth of shares and $1 billion of zero-coupon convertible debt to finance its bitcoin purchases in what it called the 'one of the largest bitcoin-treasury deals for any public company." The company also filed a registration statement with regulators, which would allow it to issue up to $12 billion of stock, debt and other securities. World Liberty Financial, the Trump family-backed crypto venture, also revealed plans on Friday to buy 'a substantial position" in the president's memecoin for the company's 'long-term treasury," according to the president's son Eric Trump. Their timing matters. The recently converted are likely to buy bitcoin and other tokens at much higher prices than earlier adopters such as Strategy. For instance, if bitcoin were to fall below $90,000 (just 15% below its current price of $106,000), the crypto holdings of some 30 public companies would be underwater, according to Geoff Kendrick, global head of digital assets research at Standard Chartered Bank. Companies adopting a crypto treasury strategy solely to boost share prices face even greater peril. Many stock investors are seeking quick gains and are likely to flee if prices plunge after a macroeconomic event, or if cybercriminals strike, said Architect Partners' Chun. 'The moment things start getting ugly, they don't have an incentive to stay," he said. Still, some analysts contend that not all crypto treasury companies are the same. Enterprises led by prominent industry figures are better positioned to withstand a downturn than businesses merely trying to ride bitcoin's momentum, according to Brett Knoblauch, head of digital asset research at Cantor Fitzgerald. He pointed to Strategy's Saylor and Twenty One Capital's Jack Mallers as the type of personalities that could continue to drive interest into their bitcoin treasury companies. 'With interest comes trading volume, with trading volume comes the ability to raise money, with the ability to raise money comes the ability to buy more bitcoin, that is the flywheel," said Knoblauch. 'There's a lot of zombie companies that might be buying bitcoin and trying to do the same thing, but it is going to be tough without the flywheel."
Yahoo
06-04-2025
- Business
- Yahoo
25% of Major Companies Might Hold Bitcoin by 2030. But Should You Buy It?
Bitcoin (CRYPTO: BTC) is increasingly an asset that major businesses are looking to buy and hold. That doesn't necessarily mean that average investors should copy their move -- after all, it doesn't make sense to buy most of the other assets that companies need to operate. Still, it's worth diving a bit deeper into this trend to see if it's worth following by buying more of the coin, or if it's a better idea to stick to your prior plans. According to Elliot Chun, a partner at Architect Partners, a cryptocurrency advisory group, by 2030, roughly 25% of the companies in the (SNPINDEX: ^GSPC) will hold Bitcoin as a long-term asset on their balance sheet. There are a handful of reasons he expects that to happen, starting with the idea that the coin can behave as a hedge against inflation in fiat currencies. It would also be a convenient way for corporate officers to diversify their treasuries, and thereby potentially reduce risk. And, if the coin continues to gain in value over time, it would prevent those officers from getting dinged for not giving their organization some exposure to the upside. Today, Chun says there are just 90 publicly traded companies holding Bitcoin as a treasury asset, and those are mainly not part of the S&P 500. If a total of 125 companies (25%) in that set held the coin, it would mean a large cohort of the world's largest players would be invested in it. The way they'd become invested in it is by buying it, and they're (largely by definition) among the most moneyed businesses that exist. Therefore, if Chen's prediction plays out, and it might, investors could see the benefits of a large amount of new demand for Bitcoin over the next few years. The question is: Does that make the coin worth buying? In a word, yes. The adoption of Bitcoin by corporate actors and financial institutions is accelerating, and, as mentioned, they tend to have more money to invest than anyone else. That means if they actually decide to hold Bitcoin on their balance sheet, they will be buying a vast quantity as a group. When more money chases the same amount of coins available to buy, the price increases. The piece of the puzzle that's a bit more complex is whether the new set of buyers can be expected to retain their coins for long enough to make the trend itself something that's worth investing based off of. After all, if businesses treat Bitcoin as just another form of cash, their purchases of it will quickly be matched by sales of the asset when they want to exchange it for goods or services. Major liquidations to fund big capital expenditures might even reduce its price. But that isn't very likely in this case. Under the current set of tax rules in the U.S., companies need to pay capital gains taxes when they sell assets that appreciated in value. Major companies hate to pay taxes when they can avoid it. So they probably won't want to sell their coins unless it's absolutely necessary. In fact, they're more likely to use the value locked in their Bitcoin as collateral to borrow against, rather than opting to use it directly. In other words, they are more likely to hold their Bitcoin for years and years than to be frequent buyers and sellers, so the price impact of their holding it will probably be positive rather than negative. This means that Chun's prediction would have very bullish consequences if it comes true. There's an easy way to benefit from the potential trend of more major companies holding Bitcoin: Buy some yourself, and then hold it. Even if these companies don't start buying as much of it as the prediction calls for, even a small amount of purchasing activity over time will buoy the price. And, as it only gets harder to mine Bitcoin over time, limiting the supply growth, it only takes a little bit of additional demand to generate significant increases in the asset's value. Before you buy stock in Bitcoin, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Bitcoin wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $461,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $578,035!* Now, it's worth noting Stock Advisor's total average return is 730% — a market-crushing outperformance compared to 147% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 5, 2025 Alex Carchidi has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy. 25% of Major Companies Might Hold Bitcoin by 2030. But Should You Buy It? was originally published by The Motley Fool
Yahoo
30-03-2025
- Business
- Yahoo
Bitcoin May be on 25% of S&P 500 Firms' Balance Sheets by 2030: Architect Partners
Bitcoin is making its way from trading desks to corporate treasuries, and by the end of the decade, it could be standard practice, according to one analyst. 'Across all the different strategies and implementations, I anticipate that by 2030, a quarter of the S&P 500 will have BTC somewhere on their balance sheets as a long-term asset,' Elliot Chun, a partner at Architect Partners, wrote in a market snapshot. The strategy—holding bitcoin as a treasury reserve asset—was unorthodox when Strategy, formerly known as MicroStrategy, first adopted it in August 2020. The firm framed BTC as a hedge against inflation, a diversification tool, and a way to distinguish itself in the market. Then CEO Michael Saylor's highly public embrace of bitcoin transformed the company into a de facto proxy for BTC exposure. Since then, MicroStrategy stock has surged more than 2,000%, far outpacing both the S&P 500 and bitcoin over the same period, Chun pointed out. GameStop is the latest company to follow suit, announcing this week that it would raise $1.3 billion through a convertible note to acquire bitcoin. Its stock initially surged following the announcement but has since endured a correction, falling nearly 15% for the week. Chun argued that treasurers may soon face career risk not for buying bitcoin, but for ignoring it altogether. 'Doing nothing is no longer a defensible strategy,' he wrote. According to BitcoinTreasuries data, publicly listed companies currently hold 665,618 BTC, around 3.17% of the cryptocurrency's total supply. Strategy holds the lion's share, 506,137 BTC. Read more: U.S. Listed Firms Continue Bitcoin (BTC) Treasury Adoption
