Following MicroStrategy, how long can the "hodling coins" frenzy sweeping US stocks last?
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Following MicroStrategy, how long can the "hodling coins" frenzy sweeping US stocks last?
While optimists see this as a step toward more mainstream Bitcoin adoption, skeptics view it as short-term hype by a few small companies.
Navigating Web3 tides with focused insightsAuthors: Aoyon Ashraf, Nick Baker
Translation: Bitpush News
Summary:
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Following MicroStrategy's successful Bitcoin accumulation strategy, numerous companies—some small-cap and unrelated to cryptocurrency—have begun announcing similar initiatives.
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This strategy has led to sharp short-term stock price increases for some, but long-term sustainability remains uncertain, according to market observers.
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While optimists view this as a step toward mainstream Bitcoin adoption, skeptics see it as mere short-term speculation by smaller firms.
Body:
Fitness equipment manufacturers, biopharmaceutical firms, battery material producers… What do these diverse companies have in common?
Bitcoin, of course.
As BTC surged to unprecedented levels this month, at least 12 publicly traded companies previously uninvolved in crypto have announced plans to purchase Bitcoin (BTC) as a treasury reserve asset—a move that has recently proven highly profitable. This follows the path illuminated by Michael Saylor since 2020, when he began transforming his obscure software firm, MicroStrategy, into a Bitcoin treasury.
The strategy has brought massive success to MicroStrategy in the U.S. stock market—its value has increased approximately 30-fold since Saylor began buying Bitcoin for the company, accumulating a war chest worth around $38 billion (as of this writing).
Just this month, following Donald Trump’s pledge to embrace crypto and his election as U.S. president, the company’s stock nearly doubled. (Other crypto-related stocks also rose: exchange operator Coinbase surged nearly 70% since the day before the election.)
Other firms are now attempting to replicate this success.
On Friday, biotech company Anixa Biosciences (ANIX) said its board approved purchasing a certain amount of Bitcoin to diversify its cash reserves. The stock jumped 19% intraday but closed up only 5%. Meanwhile, fitness equipment firm Interactive Strength (TRNR) announced Thursday that, after board approval to include crypto as a treasury asset, it plans to buy up to $5 million worth of Bitcoin. Its shares soared over 80% briefly after the news, closing up just 11%.
Earlier last week, biopharmaceutical firm Hoth Therapeutics (HOTH) announced a $1 million Bitcoin purchase plan, sending its stock up as much as 25%—though nearly all gains were erased by close. Similarly, companies including LQR House (LQR), Cosmos Health (COSM), Nano Labs (NA), Gaxos (GXAI), Solidion Technology (STI), and Genius Group (GNS) saw brief stock spikes after announcing Bitcoin treasury plans in November. Only one company declined after such an announcement: Acurx Pharma (ACXP).
"The recent Bitcoin frenzy, coupled with MicroStrategy’s surge of over 500% in 2024, has triggered a wave of companies—especially small-caps—to announce Bitcoin purchase strategies," said Youwei Yang, chief economist at BIT Mining (BTCM).
Whether these MicroStrategy imitators will achieve similar success remains unknown.
"This behavior could end the same way as previous bull markets: unsustainable hype followed by sharp corrections, as the market realizes many of these announcements lack substance," said Youwei Yang.
It's also technically uncertain whether the latest entrants will follow through. So far, only AI company Genius Group is known to have actually purchased Bitcoin.
But who can blame them?
Early investors in MicroStrategy have reaped enormous returns, and even recent investors stand to gain easily. Saylor primarily raised funds through stock and bond issuances to buy Bitcoin. These copycats may thereby gain access to capital markets they otherwise wouldn't have.
The market adheres to the old adage "never fight the tape"—going with the trend regardless of fundamentals. Companies want to meet market demand; no one wants to be the person telling their boss or shareholders that poor performance was due to not following MicroStrategy's lead.
"Just a few years ago, buying Bitcoin was almost too risky. Now the risk seems reversed—not buying is the real risk," said Brian D. Evans, CEO and founder of BDE Ventures, adding, "Not having exposure to Bitcoin is truly painful."
For the hopeful, this sudden corporate scramble may signal Bitcoin’s long-awaited mainstream adoption, especially against the backdrop of President-elect Trump expressing desire for the U.S. government to accumulate Bitcoin as well.
"For BTC supporters, macro factors like expected inflation and improved regulatory sentiment could encourage more companies to add this asset to their balance sheets," said Toronto-based crypto platform FRNT Financial in a report.
Beyond sentiment, a Bitcoin purchase strategy can open capital market doors, as demonstrated by MicroStrategy and miner MARA Digital (MARA). Both recently raised capital via convertible bonds that pay no interest to investors—meaning investors willingly forgo current income in exchange for the potential to convert debt into equity and gain Bitcoin exposure.
Saying they plan to buy Bitcoin "is a useful way for companies to raise capital, not unlike what MicroStrategy has done over the past few years," said BDE’s Evans.
Yet to others, this sounds like a rerun of the late-2010s fad, when countless crypto-unrelated firms added "blockchain" to their names.
The most famous case was obscure beverage maker Long Island Iced Tea, which rebranded itself as Long Blockchain, achieving explosive initial results: its stock nearly tripled in a single day post-rebrand. The rally didn’t last, and the stock was later delisted from Nasdaq. (Three individuals were charged by the SEC with insider trading.)
Other "magic" words emerged. During the 2021 crypto bull run, many large corporations adopted terms like "Web3," "metaverse," and "NFT" to boost their stock prices. Even Facebook rebranded as Meta, betting big on the metaverse. Yet these moves ultimately led to massive losses.
Meanwhile, some struggling, crypto-unrelated firms ventured into Bitcoin mining, then seen as a lucrative business. But the brutal bear market that followed knocked these once-celebrated crypto concepts off their pedestals, turning them into pariahs.
Youwei Yang noted that while MicroStrategy has successfully raised billions from capital markets to fund Bitcoin purchases, if others adopt the same playbook, it could backfire on smaller firms. "For small caps, it might be seen as a short-term gimmick, deterring serious investors. If Bitcoin’s price stabilizes or drops, the speculative appeal of these stocks may fade, leaving them vulnerable to investor skepticism and regulatory scrutiny."
David Siemer, co-founder and CEO of Wave Digital Assets, echoed this concern: "While this approach may yield short-term gains during a bull market, it carries significant risks. Unlike direct asset ownership, leverage amplifies potential losses during market corrections, highlighting inherent dangers." He pointed out that some firms are using Bitcoin hype to increase debt on their balance sheets.
Regardless of who is right, the magic persists in the wake of Trump’s U.S. election victory, with Bitcoin repeatedly hitting new highs: announce a Saylor-style Bitcoin plan and see if your stock takes off.
"We seem to be at a point where many companies feel they must do this," said BDE founder Brian D. Evans.
In any case, welcome to the new crypto bull market.
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