Why Companies Are Investing in Cryptocurrency
A growing number of public companies are entering the cryptocurrency space. These firms, many of which do not specialise in digital assets, are adopting bitcoin treasury strategies. This means they are allocating part of their cash reserves to bitcoin, hoping to boost value and investor interest.
According to a report from Standard Chartered, 61 listed companies have started using this approach. They aim to replicate the success of firms like Strategy (formerly MicroStrategy), a software company that began buying bitcoin in 2020. Strategy now holds over $63 billion in bitcoin. Since 2020, its stock has risen more than 3,000%, reflecting bitcoin’s dramatic price rise past $110,000 this year.
These bitcoin-focused companies often attract investor premiums. Unlike individual investors or ETFs, public companies can access credit markets, such as issuing convertible debt, to buy more bitcoin. This potential for leverage adds to their appeal.
Who Is Joining the Bitcoin Movement?
Strategy is not alone. Trump Media & Technology Group, founded by former President Donald Trump, raised $2.5 billion last month to invest in bitcoin. Other players include Twenty One, a $3.6 billion venture backed by SoftBank, Tether, and Cantor Fitzgerald. Their aim is simple: acquire more bitcoin.
SolarBank, a Toronto-based solar firm, also announced a bitcoin treasury plan. CEO Richard Lu explained that it’s a strategy to attract younger, tech-oriented investors. He said, “The crypto part is a bridge between a classic industry and modern excitement.”
In another move, Upexi, a consumer goods company, launched a treasury strategy focusing on Solana, another major cryptocurrency. Brian Rudick, the firm’s chief strategy officer, said investing in digital assets can generate attention and growth. He added that companies have a duty to make decisions that benefit shareholders—and right now, crypto may be one of those.
What’s Driving the Trend?
This corporate shift toward crypto coincides with political changes. President Trump, who is running for re-election, has taken a pro-crypto stance. In March, he signed an executive order to create a strategic bitcoin reserve and hosted crypto leaders at the White House.
This policy change has encouraged more institutions to explore digital assets. “It’s a serious tailwind,” said OKX CEO Roshan Robert. He believes that building crypto treasuries is just one piece of a larger institutional shift.
Carnegie Mellon professor Chester Spatt added that some companies might be seeking political favour by aligning with Trump’s crypto enthusiasm.
The Risks of Bitcoin Treasury Strategies
Despite the excitement, risks remain. The crypto market is known for its volatility. If bitcoin prices fall significantly, companies holding large amounts could face financial strain.
Charles Schwab warned in a recent report that firms could face liquidity problems if crypto values drop. Standard Chartered estimates that a fall below $90,000 would leave half of corporate bitcoin holdings at a loss.
Ravi Doshi from FalconX noted, “There will be big winners and big losers. That’s always the case when market mania sets in.”
with inputs from Reuters