Corporate entities focused on cryptocurrency treasuries are reportedly poised to acquire over $7.8 billion in digital assets this week. This potential surge in crypto buying represents a significant move, especially concerning alternative cryptocurrencies (altcoins).
A review by our team of sixteen corporate announcements made since Monday reveals plans for major crypto acquisitions or capital raises intended for such purchases. Ethereum (ETH) appears to be the prime target of this buying spree.
Analysis indicates that at least five publicly traded companies have either completed or committed to purchasing over $3 billion worth of ETH. This figure is approximately 45 times greater than the total amount of ETH issued during the preceding week.
These specialized “crypto treasury” firms are gaining traction on Wall Street as traditional financial institutions, often facing restrictions on direct crypto investments or related exchange-traded funds (ETFs), explore alternative avenues to participate in the rapidly expanding digital asset market.
Ethereum’s Corporate Appeal Grows
Bitcoin mining company BTCS Inc. revealed plans on Tuesday through an SEC filing to potentially sell up to $2 billion in stock to finance future acquisitions of Ethereum.
Sharplink Gaming, helmed by Joe Lubin and already a major Ethereum treasury holder, further increased its ETH holdings through two substantial purchases on Monday and Thursday, totaling $338 million.
The Ether Machine also actively acquired ETH this week, adding 15,000 ETH to its holdings for approximately $57 million.
Furthermore, two new entities focused on Ethereum acquisitions emerged this week. Biotech firm 180 Life Sciences Corp rebranded as ETHZilla Corporation in a $425 million deal, while merchant banking firm Fundamental Global transformed into FG Nexus through a $200 million transaction.
Altcoins Also Attracting Crypto Treasury Firms
Beyond Ethereum, cryptocurrency treasury companies are showing significant interest in altcoins.
Tron Inc., a publicly listed toy manufacturer recently acquired by Justin Sun’s Tron blockchain, announced plans on Monday to raise $1 billion to purchase Tron’s native token (TRX).
Additionally, three other companies have indicated their intent to acquire Solana (SOL), Sui (SUI), or BNB (BNB) – a token closely linked to the Binance cryptocurrency exchange.
Notably, CEA Industries, a Canadian vaping company, transitioned into a BNB-focused treasury firm following an acquisition by 10X Capital and YZi Labs. This firm was once described as the family office of Binance co-founder Changpeng Zhao.
CEA Industries aims to raise at least $500 million, with the potential to access up to $1.25 billion, to invest in BNB, reportedly primarily owned by Zhao and Binance.
On Thursday, technology firm Cemtrex Inc. announced the purchase of $1 million worth of SOL, with plans to expand its holdings to $10 million. Mill City Ventures III finalized a $450 million deal to shift its focus to acquiring Sui.
Crypto Buying Firms Manage $100 Billion, But Risks Exist
Galaxy Research analyst Will Owens, in a report published Wednesday, estimated that crypto treasury companies collectively manage over $100 billion in cryptocurrency assets, with $93 billion allocated to Bitcoin.
Owens cautioned that this business model is not without risk, and valuations vary widely as investors apply “widely different” equity premiums to a company’s net asset value (NAV).
For example, Michael Saylor’s Strategy (formerly MicroStrategy) exhibits an equity premium of 58%, which Owens attributed to its “scale and maturity,” while Japan’s Metaplanet trades at a significantly higher premium of 179% due to its “aggressive capital formation model.”
He further noted that the viability of the model “critically depends on a persistent equity premium to NAV. If the premium collapses, or worse, flips to a discount, the model begins to break.”
Owens concluded, “The treasury company trade is becoming increasingly crowded. When hundreds of firms adopt the same one-directional trade (raise equity, buy crypto, repeat), it can become structurally fragile. A downturn in any of these three variables (investor sentiment, crypto prices, and capital markets liquidity) can start to unravel the rest.”
Strategy Fuels Bitcoin Acquisitions
Bitcoin remained a popular choice among crypto treasury firms, with seven companies proposing or completing purchases totaling $2.7 billion.
Strategy, formerly MicroStrategy, acquired 21,021 Bitcoin after raising $2.5 billion through its fourth preferred stock offering, STRC.
The Smarter Web Company, based in the UK, also invested approximately $26.5 million in 225 Bitcoin, while Metaplanet purchased 780 Bitcoin for around $92 million.
ZOOZ Power Ltd., an energy company, launched a new Bitcoin treasury initiative on Tuesday, announcing plans for a $180 million deal to acquire Bitcoin.
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