Purchasing Their Own Stocks for Survival
The third quarter is proving to be challenging for companies that have emulated Michael Saylor’s strategy (formerly known as MicroStrategy).
These companies are witnessing a decline in stock prices, with their overall share value falling below the market value of their cryptocurrency holdings.
Numerous digital asset treasuries, or DATs, have started to buy back their own shares. According to FT reporter Nikou Asgari, this could indicate a potential collapse.
Summary
- The stock prices of various companies imitating the strategy saw a spike shortly after announcing their cryptocurrency pivot.
- Currently, they are looking to borrow up to $250 million to repurchase their shares in hopes of boosting their stock prices.
- This trend reflects the instability in the overall digital asset treasury sector, with many having a lower market cap than the Bitcoin they hold.
Buybacks
An FT report highlights seven smaller companies whose foray into corporate Bitcoin has been rocky. The article mentions Semler Scientific, ETHZilla, Empery Digital, CEA Industries, Metaplanet, SharpLink Gaming, and Ton Strategy. Five of these companies now have market capitalizations that fall below the value of their Bitcoin holdings.
Most of these firms made their cryptocurrency pivots just a few months ago, usually experiencing a short-term surge in stock prices post-announcement, followed by a decline. Recently, all of these companies have resorted to share buybacks, hoping this will help elevate their stock prices.
For these companies, it is essential to keep their stock prices above the value of their crypto assets. If not, they won’t be able to maintain Saylor’s strategy and continue purchasing crypto. These DATs have raised significant amounts of debt to facilitate their share repurchases.
Asgari posits that these instances may signal the waning of what he terms the “Bitcoin Treasury craze.” The article includes commentary from Morgan McCarthy, an analyst at the crypto analytics company Kaiko, stating, “It’s probably the death rattle for a few [of these companies].”
McCarthy surmises that these firms are merely trying to buy time in anticipation of the next cryptocurrency market rally.
Moreover, Asgari points out that share buybacks are not exclusive to corporate crypto treasuries; many companies employ this tactic to bolster their share prices.
Semler Scientific and Strive Asset Management Merger
While the FT article questions whether accumulating digital assets is a viable strategy, it suggests that a collapse is not the only possible outcome. Asgari notes that struggling Bitcoin treasury firms might become appealing targets for acquisitions. An example is Semler Scientific, which was acquired by Vivek Ramaswamy’s Strive Asset Management on September 22. This merger has created the third-largest Bitcoin treasury, holding 10,900 BTC, with a 210% premium for Semler shareholders.
Scott Melker, host of The Wolf of All Streets podcast, remarked that this deal could signal the onset of consolidation in the corporate Bitcoin landscape. He also indicated that the acquisition of Semler Scientific won’t be the last and is “almost certainly not the largest.”
Was ‘Paper Bitcoin Summer’ Hot?
In the first half of 2025, Bitcoin treasuries were a trending topic. However, by July, multiple companies sought to replicate Saylor’s success by investing in alternative cryptocurrencies, including Ether, Dogecoin, Official Trump, and various others.
Simultaneously, it became evident that many BTC treasuries were underperforming. A notable example is David Bailey’s Nakamoto stock, which plummeted over 50% in a single day.
DL News cites a former Goldman Sachs analyst, Dom Kwok, asserting that stock prices are diverging from the actual cryptocurrency values, leading to investor disinterest.
Another indication that digital asset treasury companies are in trouble is that Metaplanet is also considering a potential share buyback. As Japan’s largest corporate BTC holder and the fifth-largest corporate Bitcoin treasury globally, the company’s CEO Simon Gerovich indicated they might initiate buybacks and issue preferred shares if their market capitalization drops below the value of their BTC balance sheet.
Moreover, the pioneer of the BTC treasury playbook, Strategy itself, is encountering difficulties as well. By the end of August, Strategy had lost approximately 15% of its value, diminishing its premium over its Bitcoin holdings.
In 2025, Strategy issued a series of preferred stocks, drawing criticism for potential asset dilution and even evoking “Ponzi vibes.” As Ethereum and other cryptocurrencies began to garner attention in July, Bitcoin treasuries lost their luster, leading to significant financial losses among investors. Despite continuing to purchase Bitcoin (currently holding over 630,000 BTC), MSTR stock remains on a downward trajectory.
In 2024, MSTR’s total value was 2.5 to 3 times greater than the value of Strategy’s Bitcoin holdings. However, by August 2025, these figures have converged significantly. This shift has undermined investor confidence and limited the company’s ability to sustain its strategy. In September, Strategy was rejected by the S&P 500 committee, despite many believing the company was a suitable candidate for the index.
While this trend does not necessarily indicate that digital asset treasuries will vanish any time soon, ambitious projects backed by prominent investors continue to surface. However, these ventures are emerging in a landscape where treasury companies are losing traction and experiencing diminishing returns.
A noteworthy example is Bullish, a highly publicized firm backed by Peter Thiel, which was launched in August. Bullish is grappling with similar challenges, with its current valuation closely mirroring the worth of its Bitcoin holdings. Only time will tell if consolidation through mergers or other means will salvage Bitcoin treasuries.