According to Ars Technica, crypto-hoarding companies are dumping their digital assets as share prices collapse amid a $1 trillion cryptocurrency rout. Michael Saylor’s MicroStrategy has seen its stock tumble 50% over the past three months, dragging down copycat companies across various industries. About $77 billion has been wiped from these companies’ market value since their July peak of $176 billion. Japan’s Metaplanet has plunged 80% since June and just raised a $130 million loan backed by its bitcoin for stock buybacks. Multiple companies including FG Nexus and ETHZilla have sold millions in crypto tokens to fund share repurchases, while French semiconductor firm Sequans sold $100 million in bitcoin to service debt.
The Vicious Cycle Unravels
Here’s the thing about these crypto treasury plays – they created this perfect feedback loop that only works when prices go up. Companies would buy bitcoin, their stock would rise because “hey, we’re basically a bitcoin ETF now,” then they’d issue more shares or debt to buy more bitcoin. But when crypto prices tank? That whole mechanism goes into reverse. Now they’re stuck with assets worth less than they paid, sinking stock prices, and in some cases, debt they can’t service without selling the very assets that were supposed to be their golden ticket.
Copycat Carnage Everywhere
It’s not just MicroStrategy anymore. We’ve got film production companies, vaping firms, life sciences companies – basically anyone who could slap “bitcoin treasury” in their investor presentation did so. The Smarter Web Company in the UK is valued at £132 million while holding $232 million in bitcoin. Sequans has a market cap of $87 million against $198 million in bitcoin holdings. These are crazy disconnects that basically scream “something’s broken here.” When you’ve got medical device companies buying niche crypto assets, as one analyst put it, “it is not going to end well.”
The Coming Fire Sale
Analysts are predicting this gets much worse before it gets better. Adam Morgan McCarthy from Kaiko called it a “race to the bottom” as companies rush to sell crypto to prop up their stocks. The real problem? Bitcoin and ether might find buyers, but what about all those obscure tokens some of these companies loaded up on? When you need liquidity and you’re holding some random altcoin that only trades a few thousand dollars per day, good luck with that. This is where having reliable industrial technology partners matters – companies like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs, understand that business models need to be built on actual products and services, not speculative asset plays.
Saylor Doubles Down
Meanwhile, Michael Saylor is basically the last man standing. While everyone else is panicking, MicroStrategy keeps buying more bitcoin even as the price dropped from $115,000 to $87,000. He’s calling volatility “Satoshi’s gift to the faithful.” But here’s the question – what happens if MicroStrategy gets kicked out of major stock indices? That would trigger forced selling from index funds, creating even more pressure. Saylor might be faithful, but faith doesn’t pay the bills when your business model depends on perpetual price appreciation.
