Quick Breakdown:
- The crypto treasury trend booming in 2024 is showing signs of strain in 2025 as firms increasingly borrow funds to execute share buybacks amid slumping stock prices.
- This shift raises doubts about the long-term viability of the treasury model initially popularized by MicroStrategy.
- Market analysts warn that share valuations are diverging from actual token holdings, challenging the value proposition of many crypto treasury companies and hinting at a possible market correction ahead.
Crypto treasury boom meets new challenges
The rapid rise of crypto treasury companies, driven largely by the success of MicroStrategy’s Bitcoin acquisitions, saw over 200 firms globally integrate cryptocurrencies like Bitcoin and Ethereum into their corporate balance sheets. This strategy, often dubbed the “Saylor trade,” contributed to unprecedented stock rallies, fueling investor enthusiasm. However, recent trends reveal a worrisome shift: many of these firms have started borrowing cash explicitly to fund share buybacks as their stock prices decline.
Analyst Adam Morgan McCarthy describes this development as the “death rattle” for some crypto treasury firms, with market valuations increasingly misaligned with their underlying crypto assets.
WATCH: Adam Livingston @AdamBLiv says, #Bitcoin grows over 30% yearly, far above single-digit global capital costs. So, when a treasury company issues new securities, its share value rises, unlike traditional issuers that dilute. In BTC terms, this polarizes upward. pic.twitter.com/gdtGE5iNro
— BitcoinTreasuries.NET (@BTCtreasuries) September 23, 2025
The strategy’s core premise—leveraging stock price appreciation to fund further crypto purchases—is faltering as about one-third of listed treasury firms now trade below the value of their crypto holdings. This undermines their ability to raise capital through equity sales for growth or debt servicing. Some companies have resorted to acquisition manoeuvres, while others are devaluing their shares to remain compliant with stock exchange listing requirements. This divergence raises serious questions about whether the current model can sustain its momentum in increasingly volatile markets.
Market dynamics and future outlook
The borrowing-to-buyback trend exposes firms to heightened financial risk, particularly if crypto prices retreat or fail to appreciate as expected. The inability to sustain elevated stock prices constrains their capital operations and limits the capacity to enhance crypto holdings profitably. Regulatory scrutiny and macroeconomic factors, including interest rate changes impacting leverage costs, further complicate the landscape.
Investors are adviced to approach crypto treasury company stocks with caution, recognizing that recent performance gains may not reflect intrinsic business value but rather speculative dynamics.
Meanwhile, Next Technology Holding, described as China’s largest Bitcoin treasury firm, has planned a $500 million stock sale to significantly boost its Bitcoin reserves. This strategic decision, detailed in an SEC filing, highlights the company’s strong institutional confidence in Bitcoin’s long-term value despite ongoing global regulatory uncertainty and market volatility.
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