As the ‘Strategy’ Strategy Accelerates, Small Firms Raise Money At Investors’ Expense to Buy Crypto — With Potentially Massive Risks

There are crypto companies… and then there are “crypto companies.” These days, it’s worth knowing the difference.

While names like CoinbaseCOIN

and CircleCRCL

have appreciated attention as pure-play crypto bets, a rising cohort of struggling firms are pivoting into the digital asset economy as their core businesses languish.

Are they really investing in digital assets — or just in self-preservation? We took a closer look.

Why buy crypto this way? In recent months, we’ve covered a wave of companies embracing the so-called ‘Strategy’ Strategy — buying crypto assets and holding them on their balance sheet. At last count, 236 entities held a combined 3.44M BTC. More are starting to accumulate EthereumETH

, SolanaSOL

, and other tokens.

But many of these aren’t crypto natives. They’re smaller outfits with fading growth prospects, using crypto as a Hail Mary. Some are “entering the crypto business,” while others are just tinkering with their treasury. Either way, they’re clearly paying attention to retail investors — and ironically, those same investors have the most to lose:

• Firms like Metaplanet, GameStopGME
  , and DDC EnterpriseDDC
  have leaned on share sales to build their Bitcoin stashes — risking shareholder dilution in the process.
• In the last week, 60 companies announced plans to build a blockchain-based balance sheet — often via stock sales or debt raises. The copy-paste playbook is catching on.

Volatility As a Feature

What exactly are they copying? A formula for good news. Positive headlines move stock prices — and for flailing businesses, that boost can be a lifeline:

• SharpLink GamingSBET
  spiked more than 2,000% last week after it announced that it became the largest Ethereum holder, buying 176K ETH — only to watch its stock collapse 87% from its ATH.
• UpexiUPXI
  said it would raise more money than its entire market cap to buy Solana. Shares soared 700%, then its stock dropped 38% — but remains higher than it was before.

Warning bells are ringing: Coinbase’s Head of Research, David Duong, warns this wave of Bitcoin and crypto treasury adoption by public companies introduces risks to the broader crypto ecosystem — especially if overleveraged players end up dumping at a loss. Maybe Standard Chartered puts things in perspective: If Bitcoin slips below $90K, half of the publicly traded firms with crypto-heavy balance sheets could go broke. Rather than ride shotgun on someone else’s risky bet, investors might be better off building their own crypto treasury.