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Three months ago, George Karam, CEO of Sequans Communications, a semiconductor company listed on the New York Stock Exchange, never considered buying bitcoin. But after a failed deal raised concerns among investors, and news of a sharp rise in the stock price of a healthcare company following a cryptocurrency purchase emerged, Karam became fascinated by the idea.
He quickly convinced his board, raised 384 million dollars 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 I strongly believe in it today... I am completely convinced that bitcoin will remain,' attributing his shift partly to Michael Saylor, the American cryptocurrency evangelist whose company 'Strategy' achieved a market value of 115 billion dollars by accumulating bitcoin and organizing conferences to attract corporate buyers.
Rise of 'crypto treasury' companies.
From biotechnology and mining companies to hotel owners and electronic 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 in the year ending August 5, 154 public companies raised or committed to invest 98.4 billion dollars to buy cryptocurrencies – a massive jump compared to the 33.6 billion dollars 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 two billion dollars to buy bitcoin and associated tokens, as companies rush to gold.
Why are investors paying a premium?
For shareholders, the key metric is 'bitcoin per share' – how much bitcoin support there is per share. Companies that rapidly expand their holdings are rewarded with valuations that often exceed the value of the cryptocurrencies themselves.
This speculative model has pushed stock prices to staggering heights, as seen with Sequans and The Smarter Web Company, which has a market value of 560 million pounds, dwarfing its modest profits of 93,000 pounds thanks to 238 million pounds in bitcoin holdings.
Brian Estes, CEO of Off The Chain Capital, likens this phenomenon to the dot-com bubble of 1998, warning that oversaturation could spell trouble if bitcoin prices fall.
Expert warnings: impending systemic risks.
The vulnerability of the model is clear – a collapse in bitcoin would lead to a decline in stock prices and prevent debt-laden buyers from meeting their obligations. Eric Benowest of Natixis CIB warns that this could be 'systemic' for the bitcoin ecosystem.
Rob Hadick of Dragonfly Capital warns that operating companies may suffer if cryptocurrency speculation diverts management's attention from core priorities. At the same time, Kevin De Patoul from Kirok points out that these companies are injecting 'a tremendous amount of risk into the system... supported only by the continued rise in asset value.'
Beyond bitcoin: expanding the bet.
While bitcoin dominates, companies are expanding into Ethereum and Solana, and even specialized tokens. ReserveOne plans to buy several cryptocurrencies worth a billion dollars from backers, including Kraken and Blockchain.com, while The Ether Machine raised 1.5 billion dollars for Ethereum.
Bob Diamond, former CEO of Barclays, raised 888 million dollars to buy HYPE tokens, while Changpeng Zhao, co-founder of Binance, invested 500 million dollars in a plan by an electronic cigarette manufacturer to buy BNB.
In markets where cryptocurrency exchange-traded funds are banned, such as the UK and Japan, 'crypto treasury' companies offer investors indirect access – sometimes with tax advantages.
The next phase: from holding coins to financial services.
Some major companies, including the Japanese company Metaplanet and the American energy company KULR Technology, are now looking into bitcoin-backed lending and financial services. The mining group Panther Metals plans to leverage bitcoin to fund exploration operations.
But history casts a shadow – the collapse of the cryptocurrency lending company FTX in 2022 was followed by a series of defaults caused by falling token prices. As Benowest warns, this strategy risks becoming a 'vicious cycle' requiring endless new purchases to maintain insurance 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... just as quickly as it has risen, it could also fall.'
Currently, the rise continues, driven by a mix of speculative enthusiasm, corporate opportunism, and the belief – or even the gamble – that the value of bitcoin will keep rising. The most important question remains: Is it a revolutionary financial strategy or a precursor to another market collapse?