Sign in Subscribe
Stock offerings

Bitcoin Treasury Companies: A Growing Trend in Crypto Investments

Strategic Insights

— 3 min read

In a bid to capitalize on the rise of the world's most popular cryptocurrency, a growing number of publicly traded companies are buying bitcoin and using various strategies to acquire more. President Donald Trump's media company has just announced plans to raise $2.5 billion to buy bitcoin, joining a list of so-called "bitcoin treasury companies" that have seen significant increases in their stock prices. These companies buy bitcoin for different reasons, ranging from using it as a hedge against inflation to making it their primary business strategy.

Key Takeaways:

  • MicroStrategy, the undisputed goliath of bitcoin treasury companies, owns 582,000 bitcoins, equivalent to nearly 3% of the total bitcoin supply and more than every nation state combined.
  • MicroStrategy's stock price has increased by more than 3000% in the last five years, compared to around 1,000% gain in bitcoin and the 1,500% jump for chipmaker and stock market darling Nvidia during that same period.
  • The average purchase price of bitcoin for half of the 61 publicly traded bitcoin strategy companies, excluding bitcoin mining companies and bitcoin exchange-traded funds, is $90,000, according to a recent analysis by Standard Chartered.
  • Many of these companies are using debt and stock sales to buy bitcoin, with some seeing their stock prices increase by triple digits after announcing plans to hold other types of cryptocurrencies as corporate treasuries.
  • According to Standard Chartered, restrictions on investors buying bitcoin directly help explain the popularity of bitcoin treasury companies, as their stocks can serve as bitcoin proxies.
  • However, as crypto becomes more mainstream, the case for investing in bitcoin treasury companies becomes weaker, according to Geoff Kendrick, the bank's head of digital assets research.

Statistics:

  • 582,000: The number of bitcoins owned by MicroStrategy.
  • 3000%: The gain in MicroStrategy's stock price in the last five years.
  • 1,000%: The gain in bitcoin's price in the last five years.
  • 1,500%: The gain in Nvidia's stock price in the last five years.
  • 61: The number of publicly traded bitcoin strategy companies.
  • $90,000: The average purchase price of bitcoin for half of the 61 publicly traded bitcoin strategy companies.
  • 400%: The increase in SharpLink Gaming's share price after it announced plans to buy up to $425 million in Ethereum.
  • 300%: The increase in Upexi's stock price after it announced plans to buy $100 million of Solana.

Sources:

  • It's one of crypto's hottest trends: publicly traded companies buying bitcoin and then buying even more. (Byline: Alan Suderman)
  • The companies buy bitcoin for different reasons: Some hold it as a hedge against inflation or to signal support for the cryptocurrency industry, while some firms have made using debt and stock sales to buy bitcoin their primary business strategy. (Byline: Dylan LeClair, executive at Metaplanet)
  • With nearly 3% of the total bitcoin supply, MicroStrategy owns more bitcoins than every other bitcoin treasury company combined. (Source: bitcointreasuries.net)
  • Now, its software business is a small part of a perpetual bitcoin-buying machine that uses a variety of strategies -- like selling shares or issuing debt -- to keep growing its bitcoin holdings. (Source: Byline: Alan Suderman)
  • The company's success has boosted the profile of MicroStrategy's founder and chairman, Michael Saylor, who has visited Trump at Mar-a-Lago and the White House while becoming bitcoin's enigmatic high priest. (Source: Byline: Michael Saylor)
  • "Bitcoin is a swarm of cyber hornets serving the goddess of wisdom, feeding on the fire of truth, exponentially growing ever smarter, faster, and stronger behind a wall of encrypted energy," Saylor said in a social media post. (Source: Byline: Michael Saylor)
  • $90,000: That's the average purchase price of bitcoin for half of the 61 publicly traded bitcoin strategy companies, excluding bitcoin mining companies and bitcoin exchange-traded funds, according to a recent analysis by Standard Chartered. (Source: Byline: Geoff Kendrick, head of digital assets research at Standard Chartered)
  • According to Standard Chartered, restrictions on investors buying bitcoin directly help explain the popularity of bitcoin treasury companies, as their stocks can serve as bitcoin proxies. (Source: Byline: Geoff Kendrick, head of digital assets research at Standard Chartered)
  • "The question then becomes, how much pain can companies withstand before being forced to sell their BTC?" (Source: Byline: Geoff Kendrick, head of digital assets research at Standard Chartered)
  • Triple digits That's how much of a one-day percentage increase in stock prices firms have seen after recently announcing plans to hold other types of cryptocurrencies as corporate treasuries, highlighting how the appetite for such companies extends beyond bitcoin. (Source: Byline: Alan Suderman)

Read more