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Three months ago, George Karam, the CEO of Sequans Communications, a semiconductor company listed on the New York Stock Exchange, never considered buying Bitcoin. But after a deal raised investor concerns, and news emerged of a sharp rise in the stock price of a healthcare company after purchasing a cryptocurrency, Karam became fascinated by the idea.
He quickly convinced his board, raised $384 million from debt and equity markets, and bought the world’s most popular cryptocurrency. The result? Sequans' stock price jumped 160% overnight.
Karam said: ‘I couldn’t say this last year, but today I believe it strongly… I am completely convinced that Bitcoin will stay’, attributing his shift partly to Michael Saylor, the American cryptocurrency evangelist whose company, Strategy, achieved a market value of $115 billion by accumulating Bitcoin and organizing conferences to attract corporate buyers.
The rise of ‘crypto treasury’ companies
From biotech and mining companies to hotel owners and e-cigarette manufacturers, companies across various sectors are ramping up their investments in Bitcoin and other digital currencies to boost their stock values.
Data from Architect Partners shows that during the year ending August 5, 154 public companies either raised or committed to invest $98.4 billion to buy cryptocurrencies – a massive jump compared to the $33.6 billion raised by just 10 companies before this year.
Some companies have rebranded themselves to adopt Bitcoin’s orange color, added public dashboards showing cryptocurrency holdings, and marketed themselves as investment tools for digital assets. Even Donald Trump’s family media company raised $2 billion to buy Bitcoin and associated tokens, amid a corporate rush for gold.
Why are investors paying a premium?
For shareholders, the main metric is the ‘Bitcoin price per share’ – that is, how much Bitcoin supports each share. Companies that rapidly expand their holdings are rewarded with valuations that often exceed the value of the currencies themselves.
This speculative model has driven stock prices to astonishing heights, as seen with Sequans and the British company The Smarter Web Company, which has a market value of £560 million, dwarfing its modest profits of £93,000 thanks to £238 million in Bitcoin holdings.
Brian Estes, CEO of Off The Chain Capital, likens this phenomenon to the dot-com bubble of 1998, warning that excess saturation could spell trouble if Bitcoin prices fall.
Expert warnings: systemic risks ahead
The vulnerability of the model is clear – a collapse in Bitcoin would lead to a drop in stock prices and prevent debt-laden buyers from meeting their obligations. Eric Benoist from Natixis CIB warns that this could be ‘systemic’ for the Bitcoin ecosystem.
Rob Haldick from Dragonfly Capital warns that operating companies may suffer if cryptocurrency speculation diverts management’s attention from their core priorities. At the same time, Kevin De Patoul from Kirok notes that these companies are injecting ‘a huge amount of risk into a system… only supported by the continued rise in the value of the asset.’
Beyond Bitcoin: scaling up the bet
While Bitcoin dominates, companies are expanding into Ethereum and Solana, and even specialized tokens. ReserveOne plans to purchase several cryptocurrencies worth a billion dollars from backers, including Kraken and Blockchain.com, while The Ether Machine raised $1.5 billion for Ethereum.
Bob Diamond, former CEO of Barclays, raised $888 million to buy HYPE tokens, and Changpeng Zhao, co-founder of Binance, invested $500 million in an e-cigarette manufacturer’s plan to buy BNB.
In markets where cryptocurrency exchange-traded funds are prohibited, such as the UK and Japan, ‘crypto treasury’ companies offer investors indirect access – sometimes with tax advantages.
The next phase: from holding currencies to financial services
Some large companies, including the Japanese company Metaplanet and the American energy company KULR Technology, are now looking to lend and provide financial services backed by Bitcoin. The mining group Panther Metals plans to leverage Bitcoin to finance exploration operations.
But history looms large – the collapse of the cryptocurrency lender FTX in 2022 was followed by a series of defaults triggered by falling token prices. As Benoist warns, the strategy risks becoming a ‘vicious cycle’ requiring endless new purchases to maintain premiums.
The inevitable reckoning?
Investors recognize that the boom may not last. While Estes supports many Bitcoin treasury companies, he predicts: ‘This crisis will end in disaster, and it will turn into a bubble… as quickly as it rises, it may also fall.’
Currently, the rise continues, driven by a mix of speculative enthusiasm, corporate opportunism, and the belief – or even gamble – that Bitcoin’s value will keep rising. The most important question remains: is it a revolutionary financial strategy or a prelude to another market collapse?