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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 deal that raised investor concerns failed, 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 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 remain,' attributing his shift partly to Michael Saylor, the American crypto evangelist whose company, MicroStrategy, 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 electronic cigarette manufacturers, firms 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 purchase cryptocurrencies – a massive leap compared to the $33.6 billion raised by just 10 companies before this year.
Some companies have redesigned their branding to adopt Bitcoin's orange color, added public dashboards showing cryptocurrency holdings, and marketed themselves as investment vehicles for digital assets. Even Donald Trump's family media company raised $2 billion to purchase Bitcoin and related tokens as part of the corporate rush to gold.
Why are investors paying a premium?
For shareholders, the key metric is the 'Bitcoin price per share' – 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 Smarter Web Company in the UK, 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 over-saturation could herald trouble if Bitcoin prices decline.
Expert warnings: Systemic risks ahead
The model's Achilles' heel is clear – a Bitcoin collapse would lead to falling stock prices and prevent debt-laden buyers from meeting their obligations. Eric Benowest from Natixis CIB warns that this could be 'systemic' for the Bitcoin ecosystem.
Rob Hadick 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 Kiroc points out that these companies are injecting 'an enormous amount of risk into a system... supported only by the continued rise in the value of the asset.'
Beyond Bitcoin: Expanding 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 purchase HYPE tokens, while Changpeng Zhao, co-founder of Binance, invested $500 million in a plan for an electronic cigarette company 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 benefits.
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 lending and financial services backed by Bitcoin. The mining group Panther Metals plans to leverage Bitcoin to fund exploration operations.
But history looms large – the collapse of the cryptocurrency lending company FTX in 2022 was followed by a series of defaults due to falling token prices. As Benowest warns, the strategy risks becoming a 'vicious cycle' requiring endless new purchases to maintain insurance premiums.
The inevitable reckoning?
Investors realize 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 rose, it could also fall.'
Currently, the surge continues, driven by a mix of speculative enthusiasm, corporate opportunism, and the belief – or even dare – that the value of Bitcoin will keep rising. The most important question remains: Is this a revolutionary financial strategy or a prelude to another market crash?