Written by: Fairy, ChainCatcher
Edited by: TB, ChainCatcher
"Buying Coins" has become a cheap and quick market capitalization boosting method in the stock market.
The "altcoin season" in the US stock market is surging, with listed companies' main businesses becoming a backdrop, and digital assets turning into a new market capitalization engine.
But the problem is becoming increasingly sharp: Will the market continue to buy into this valuation game done in the name of buying coins?
Valuation Logic: How Does Buying Coins Affect Corporate Value?
"Buying coins" seems like a valuation shift experiment woven together by emotions, liquidity, and narrative.
In the traditional valuation framework, corporate market value stems from a comprehensive pricing of core variables such as profitability, asset-liability structure, growth potential, and free cash flow. However, in this wave of "coin buying," companies' "financial asset allocation" of holding crypto assets has leveraged market revaluation.
When enterprises incorporate Bitcoin or other mainstream crypto assets into their balance sheets, the market's valuation adds a premium multiple based on the price elasticity and trading expectations of crypto assets. In other words, corporate market value now comes not just from value creation, but also from a leveraged amplification of the possibility of "coin price increases".
But this structure almost places "liquidity narrative" above corporate operations, transforming financial allocation into the main axis of capital operations.
Short-term Boost, Long-term Still a Question Mark
Undeniably, entering crypto does have the ability to stimulate stock prices in the short term. Take Cango, a car trading service provider, as an example. In November 2023, the company announced entering the Bitcoin mining field, investing $400 million to purchase 50 EH/s computing power, and its stock price immediately soared by 280%. Similarly, many companies with mediocre main business performance, or even deep in financial difficulties, are trying to seek re-evaluation in the capital market through the "buying coins" narrative.
We have compiled stock price data for a batch of listed companies achieving "coin-stock linkage" through crypto asset purchases:
From market performance, the phenomenon of "buying coins equals surge" has played out multiple times. As long as the "crypto asset" concept is played, short-term funds quickly pour in. However, after the short-term spike, many "coin-holding companies" face stock price corrections. Without continuous coin purchasing actions or other positive news to stimulate, the gains are hard to maintain.
Therefore, while the "buying coins" strategy can spark market enthusiasm in the short term, whether it can be transformed into long-term corporate competitiveness and sustained growth remains highly uncertain. The market also finds it difficult to truly recognize those followers who seek attention merely through one or two coin purchases or vague "coin holding plans".
Are Speculators Starting to Sell?
The story of "buying coins to boost valuation" continues to ferment, but some core players seem to be quietly taking profits.
Strategy, the proposer of this "infinite growth" theory, has its internal executives continuously selling their stocks $MSTR. According to SecForm4.Com data, Strategy's internal personnel have entered a concentrated selling period since June 2023. Protos reported that in just the past 90 days, executives have sold a total stock amount of $40 million, with selling times 10 times more than buying times.
Image source: secform4.com
The "SOL version of MicroStrategy" Upexi is also facing pressure recently. The company previously raised $100 million to establish a SOL treasury. However, Upexi plummeted 61.2% intraday yesterday, as investors registered to sell 43.85 million shares, equivalent to its total circulating shares in early April.
On the other side, stablecoin issuer Circle saw its stock price once soar to near $300 after listing. However, Ark Invest, which strongly supported it before its listing, has been continuously reducing its holdings. It is reported that Ark Invest has sold Circle stocks four times consecutively, reducing over 36% of its position.
When "buying coins" becomes a packaging, a market value tool, or even a narrative shell to avoid fundamental questioning, it is destined to not be a "pass key" for all enterprises. Today's market is willing to pay for "financial allocation," but tomorrow's market may return to a real inquiry about growth and profitability.
The secondary market's buying may not necessarily be an endorsement; more likely, it is a short-term speculative chip rotation.
