The ‘Crypto Treasury’ Strategy of Bitcoin Companies is Collapsing – From Strategy to Metaplanet
Editor
As of December 2, 2025, intriguing changes are occurring in the cryptocurrency market. Companies that once garnered attention with their ‘crypto treasury’ strategy are now facing crises one by one, raising questions about the business model itself. According to a report by the Korea Economic Daily, as Bitcoin plummeted to the $86,000 mark, these companies are deepening their concerns.
In fact, the ‘crypto treasury’ strategy, while seemingly simple, was quite a sophisticated business model. Companies would raise funds through cash or stock issuance to purchase large amounts of cryptocurrencies like Bitcoin, thereby increasing corporate value through the appreciation of these assets. As Bitcoin prices rose, so did the company’s stock price, allowing them to sell shares at a higher price to buy even more Bitcoin, creating a virtuous cycle.
However, this model is now seriously faltering. The most representative case is MicroStrategy. Led by Michael Saylor, known as the ‘Bitcoin evangelist,’ the company currently holds about 650,000 Bitcoins, which accounts for a staggering 70% of the Bitcoin held by companies worldwide. It’s an incredible concentration.
Yet, MicroStrategy’s stock price has plummeted by about 60% from its peak in July. More concerning is that JP Morgan recently warned in a report that “MicroStrategy risks being excluded from key benchmark indices like MSCI USA and Nasdaq 100.” Being removed from major indices could lead to reduced liquidity due to ETF fund outflows and increased funding costs, significantly diminishing investment appeal.
The Shock of Saylor’s ‘Green Dot’ Statement
More intriguing is Saylor’s recent move. On December 1, he posted a cryptic message on X (formerly Twitter), saying, “What if we start adding ‘green dots’?” The Bitcoin community interprets this as a signal of significant change. Until now, Saylor has consistently posted charts with ‘orange dots’ to announce additional Bitcoin purchases, but switching to ‘green dots’ could mean a shift to boosting shareholder value through share buybacks instead of Bitcoin purchases.
This change could signify not just a simple strategy adjustment but a fundamental paradigm shift. So far, MicroStrategy’s strategy was based on the virtuous cycle of “Bitcoin price rise → company stock price rise → high-priced stock issuance → more Bitcoin purchases.” However, as Bitcoin wavers, this formula is starting to break. In fact, until July, the company’s market capitalization was much higher than the value of the Bitcoin it held, but now that premium has significantly diminished.
Sean McNulty, head of trading at cryptocurrency firm FalconX, predicted, “The inflow of funds into Bitcoin ETFs is minimal, and bargain hunting has disappeared,” adding, “The cryptocurrency downturn is likely to continue in December.” As of December 2, Bitcoin is trading at the $86,000 level, which is more than a 5% drop from 24 hours ago.
More Severe Crisis for Latecomers
Companies aspiring to be the ‘second MicroStrategy’ and belatedly hoarding cryptocurrencies are in an even more severe situation. The case of 180 Life Sciences (now Etherzilla) is representative. Originally a biotech company, it changed its name to Etherzilla in August and began accumulating Ethereum, but its stock price has plummeted to one-sixth of its August peak. The company’s market capitalization has shrunk to $206 million, falling below the $300 million worth of Ethereum it holds.
Etherzilla’s chosen solution in this situation is intriguing. It plans to borrow $80 million using its Ethereum holdings as collateral to buy back $250 million worth of its own shares. This move is completely opposite to the existing ‘cryptocurrency purchase’ strategy. While not selling the cryptocurrency, using it as collateral to buy back shares can be seen as an attempt to move away from a cryptocurrency-centric strategy.
Volcon, which changed its name from a golf cart manufacturer to EmpiriDigital, is in a similar situation. After the name change in July, its stock price soared but has recently given back all gains, and it has borrowed $85 million for share buybacks. Japan’s largest Bitcoin-holding company, Metaplanet, is even more dramatic, announcing plans to secure a $130 million loan using Bitcoin as collateral for share buybacks, despite an 80% stock price drop from its June peak.
More direct actions are also emerging. French semiconductor company Sequans sold $100 million worth of Bitcoin last month to repay debt. This signifies a complete abandonment of the ‘crypto treasury’ strategy. Companies that once borrowed to invest in cryptocurrencies are now selling those cryptocurrencies to pay off debt.
Wall Street experts see these moves as evidence that the ‘crypto treasury model’ has run its course. Elliott Chen, an analyst at Architect Partners, noted, “These companies’ business models were built on the premise that the market value of the company would rise faster than the value of the cryptocurrencies they hold,” adding, “Using funds meant for cryptocurrency purchases for share buybacks directly contradicts the crypto treasury concept.”
I think this analysis hits the nail on the head. For this model to work, the premium of ‘corporate value > cryptocurrency holdings value’ must be consistently maintained, but as cryptocurrency prices become unstable, this formula has broken. Consequently, companies no longer have a reason to buy cryptocurrencies and are instead returning to traditional financial strategies like share buybacks or debt repayment.
Adam Morgan McCarthy, an analyst at Kaigo, also expressed concerns, predicting, “As companies rush to sell coins, the situation will worsen,” adding, “The sale of coins by companies could lead to a vicious cycle of coin price declines.” Given the substantial amount of cryptocurrencies these companies hold, the impact of their selling pressure on the market cannot be ignored.
Personally, I see this situation as a natural phenomenon in the maturation process of the cryptocurrency market. The simplistic formula of ‘just buying Bitcoin increases corporate value’ lasting so long was rather unusual. Ultimately, a company’s intrinsic value comes from the products or services it creates and its profitability, and receiving a premium simply for holding a lot of cryptocurrencies seems unsustainable.
This has significant implications for Korean investors as well. There was a time when cryptocurrency-related stocks were highly popular domestically, but this case once again demonstrates that investments in such ‘thematic stocks’ inherently carry high volatility. While this doesn’t deny the long-term potential of cryptocurrencies, a more cautious approach is needed from a corporate investment perspective.
It will be interesting to see which direction these companies take in the future. There are likely three major paths: first, like MicroStrategy, halting cryptocurrency purchases and shifting to share buybacks; second, like Sequans, selling off cryptocurrency holdings and returning to core business; and third, maintaining a long-term cryptocurrency holding strategy. Which choice is correct will only be revealed with time, but at the very least, the ‘buy at all costs’ strategy needs reevaluation.
This article was written after reading a finance article and adding personal opinions and analysis.
Disclaimer: This blog is not a news outlet, and the content reflects the author’s personal views. Responsibility for investment decisions lies with the investor, and no responsibility is assumed for investment losses based on the content of this article.
