Crypto ‘treasury’ companies: first borrow, then sorrow

Getting your Trinity Audio player ready...

Digital asset ‘treasury’ firms continue to buy tokens with borrowed cash and now seek to use those debt-funded tokens as collateral to take on still more debt to buy companies with actual cashflow.

• Strategy losing its mojo?
• Saylor clones a motley crew
• Can’t wait for the Liberty Reserve reserve
• Metaplanet wants to buy a bank … on credit
• Is the bloom already off the treasury rose?

Strategy, the Michael Saylor-led company formerly known as MicroStrategy (NASDAQ: MSTR), surprised the markets on Monday by not announcing a new mega-purchase of BTC tokens. It’s the first time since early April that Strategy hasn’t attempted to light a fire under BTC’s stagnant fiat price, but Saylor signalled his intentions the day before, tweeting “[s]ome weeks you just need to HODL.”

Since embarking on its ‘treasury’ campaign a few years ago, Strategy has amassed a haul of 597,325 tokens worth ~$65 billion at today’s prices. The company believes this ranks it 11th among all corporate reserves, most of which choose to hold their dry powder in fiat cash and its equivalents.

Saylor did announce a new plan to raise up to $4.2 billion by selling more shares of Stride (STRD), one of several new Strategy offshoots (STRK, STRF) aimed at spreading the company’s financial obligations among different entities. The markets took little notice of the news, leaving Strategy’s share price relatively unchanged.

But there’s growing skepticism about how long Saylor will be able to maintain his borrow-and-buy efforts, given the ever-greater interest/dividends he’s been forced to offer to ensure willing buyers. Meanwhile, existing Strategy shareholders are facing dilution, as evidenced by the company selling 1.35 million shares in late June to help finance its BTC purchases.

Saylor’s high-wire act has attracted the interest of short-sellers, including Jim Chanos, who announced this spring that he was shorting MSTR while buying BTC directly. Chanos sees no reason why a company that does little beyond holding BTC should be worth more than the value of the BTC it holds.

Chanos has mocked Saylor’s formulas for how investors should judge MSTR/STRD/STRF/STRK, as well as Saylor’s invented vocabulary (‘Bitcoin yield’, etc.), calling it “financial gibberish.” Chanos has even suggested that Saylor doesn’t appear to understand the obligations of all this debt he’s taken on.

Saylor has dismissed Chanos’s arguments, saying the short-seller could “get liquidated and wiped out” if Saylor is right and Chanos is wrong. Chanos remains unmoved, calling Saylor’s theories “a wonderful sales job.”

If Michael Saylor jumped off a cliff, would you?

Chanos has even less respect for the legions of Strategy clones that have emerged in the wake of the company’s BTC-boosted stock price. There are currently 143 companies listed on the Bitcoin Treasuries site, spanning business sectors from block reward miners to medical technology firms. New ones arrive literally every day with ever larger fundraising plans.

Consider some of the more unusual announcements of late:

• On June 11, Mercurity Fintech Holding announced plans to raise $800 million for its BTC reserve. Chanos was quick to note the company boasted annual revenue of $1 million.
• On June 23, Norwegian deep-sea mining outfit Green Minerals, whose stock hasn’t traded over NOK10 (US$1) since mid-2022, announced that it and unspecified ‘partners’ planned to spend $1.2 billion buying BTC. Its stock promptly surged from NOK 2.32 to over NOK6 but sank back to NOK3 after the company bought a mere four BTC.
• On June 29, shareholders in Spanish coffee chain Vanadi Coffee voted in favor of a plan to spend up to €1 billion ($1.2 billion) buying BTC. Vanadi, whose operations span a total of six cafes, has a market cap under €3 million ($3.5 million) and lost €3.3 million ($3.8 million) last year.
• On July 2, Addentax Group, a Shenzhen-based garment maker, announced it had signed a non-binding term sheet with “a substantial and independent Bitcoin holder” to acquire up to 12,000 BTC worth ~$1.3 billion in exchange for new shares of Addentax stock. For the record, Addentax’s current market cap is under $6.5 million, so this deal should dilute existing shareholders down to about, um, zero.

Some more serious endeavors, including ReserveOne, count among its directors Wilbur Ross, former U.S. Secretary of Commerce during President Trump’s first term. Its CEO will be Jaime Leverton, former CEO of block reward miner Hut 8 (NASDAQ: HUT), and its investors include the Kraken and Blockchain.com digital asset exchanges.

ReserveOne plans a reverse merger with M3-Brigade Acquisition V Corp (NASDAQ: MBAVW), a Nasdaq-listed special purpose acquisition company (SPAC), that could conclude sometime in Q4. ReserveOne wants to raise over $1 billion to purchase BTC, ETH, and SOL, then stake the lot in order to generate yield.

Back to the top ↑

Mixing it up

Building a treasury around tokens other than BTC appears to be the latest fashion for companies looking to stand out from the herd. Late last month, Chinese ASIC chip maker Nano Labs announced its ‘strategic reserve’ would look to add $1 billion worth of BNB, the native token of the BNB Chain (aka Binance Smart Chain).

Singapore-based Trident Digital Tech Holdings recently announced that it wants to raise up to $500 million to build a treasury based on Ripple Labs’ XRP token. The company, which boasts a market cap of under $21 million, is following in the footsteps of Chinese travel bookers Webus, who have their own plans to raise $300 million to buy XRP.

After languishing under $4 for most of 2025, SharpLink’s shares rocketed to nearly $40 following its ETH announcement. But after the excitement wore off, the shares sank back to $9 by mid-June and remained there until last week, when shares began nudging upward as the company announced more and more ETH purchases.

On Tuesday, SharpLink shot up $3.62 to $16.29 on news that its ETH stash had topped 205,000, second only to the Ethereum Foundation. All of SharpLink’s ETH has been committed to staking and restaking protocols to generate yield. SharpLink has generated a total yield of 322 ETH since June 2, while raising another $64 million in cash since June 28.

Then there’s Bitmine Immersion Technologies, a little-known block reward miner that reported an operating loss of nearly $900,000 in its most recent quarterly report. Bitmine launched its BTC treasury in June, then announced a major pivot, raising $250 million to initiate an ETH treasury. Shortly thereafter, Bitmine’s share price spiked from below $4 to $133, and while it’s since slipped back to $111.50, shareholders don’t appear all that bothered.

Bitmine appointed Tom Lee, CEO of market analysts Fundstrat, as its new chairman. Lee told CNBC that ETH was the right play because the Ethereum network is “the backbone and architecture of stablecoins so it’s important to create a project that accumulates [ETH] to essentially protect and have some influence on the network.”

Back to the top ↑

Metaplanet

As of July 8, Japan’s Metaplanet (JPX: 3350.T) had risen to fifth on the corporate treasury list with 15,555 BTC worth ~$6.4 billion. Oddly, its July 7 announcement that it had acquired another 2,204 BTC sparked an abrupt plunge in Metaplanet’s share price, but the stock rebounded after the company unveiled the latest plank of its BTC plan.

On Tuesday, the Financial Times quoted Metaplanet CEO Simon Gerovich discussing the company’s long-term plan to acquire over 210,000 BTC—1% of the total supply—by the end of 2027.

Gerovich said the next move would be to use this BTC as collateral to “get cash that we can use to buy profitable businesses, cash-flowing businesses.” Gerovich might as well have said ‘businesses unlike Metaplanet,’ which, until its mid-2024 BTC treasury pivot, had failed to report an operating profit in seven years.

While Gerovich stressed that his company’s acquisition plans were “still really, really early days,” he did suggest that one of Metaplanet’s first acquisition plays could involve “a digital bank in Japan and providing digital banking services that are superior to the services which retail now is getting.”

Metaplanet has been among the most aggressive treasury firms out there, but one gets the sense that they’re getting a little out over their skis here. Metaplanet’s most recent BTC buy was fueled by $208 million in zero-interest bonds. The company’s 210,000 BTC target will require the company to spend $5.4 billion, a good portion of which will likely be new debt.

That’s a fine plan if BTC proceeds along an ever-skyward path, but it’s unclear what provisions have been made should BTC’s value either remain mired in its current plateau or take a significant tumble (as it has been wont to do from time to time).

When you bring banks into this equation—banks bought on credit using unreliable (and unpaid for) assets as collateral—you start to hear echoes of previous financial bubbles, in which leverage and rehypothecation greased the wheels of success. That is, right up until the moment they didn’t.

Back to the top ↑

BTC: a victim of its own success

There are signs that investors are wearying of the ‘me too’ treasury rush, with each meteoric stock pump a little less intense and a little shorter in duration. Analysts predict that the current wave of treasury companies isn’t likely to last, as each new entrant makes all the others just a little less special and offers less reason to elevate stock prices above the value of their treasuries.

Companies acquired 131,000 BTC tokens in the three months ending June 30, while BTC-focused exchange-traded funds (ETFs) acquired 111,000 tokens over the same period.

And yet, BTC ended the quarter about $5,000 below its mid-May all-time high of $111,814. So, all this corporate buying isn’t achieving the moon-bound liftoff so many treasury boosters are counting on to ensure the viability of their schemes.

With old-school whales selling and corporations/institutions buying, BTC’s reputation is being rewritten (in the words of Bloomberg’s Olga Kharif) “from a high-octane trade to a slow-burn allocation.” So all those companies buying the top today aren’t likely to see the exponential increases they’re banking on, at least, not in the short term.

Meanwhile, the corporate buy-and-hold activity has led to an 18-month low in the volume of BTC transactions. This trend is accelerating, as transactions fell 15% from May to June.

BTC’s mempool of transactions waiting to be recorded on the blockchain has nearly been emptied, as miners who once rejected low-value transactions are now eager to process any transaction they can.

As one observer put it, “almost all of Bitcoin’s actual users have gone away,” transforming BTC into “a completely custodial asset run by governments and institutions.”

In other words, while BTC long since stopped being the ‘peer-to-peer electronic cash’ described in the Bitcoin white paper, it may finally be stuck with that alternative mantra of ‘digital gold.’ Or should that be digital fool’s gold?

Back to the top ↑

Watch: Bringing the Metanet to life with Teranode