The story of "coin stocks" Who is footing the bill?

The stock market and the coin market, once two groups that looked at each other with disdain, have finally progressed from a courtroom confrontation to a warm embrace.

A few years ago, when it came to the mainstream stock market’s view on the coin market, it might have been hard to find any praise; even a neutral statement like “let each go their own way” would be considered respectful. The force of action is mutual; the coin market’s rejection of the stock market is also visibly apparent. Most people in the coin circle believe that the lofty stock market has no merits either, as it is just a zero-sum game; who is morally superior?

But as time has come to this year, the two major groups unexpectedly went through the process of meeting, getting to know each other, and falling in love, quickly reaching the intersection of interests. The crystallization of this love, the coin-stock, thus came into being.

Unlike the tokenization of US stocks that aims to bring them onto the blockchain, coin stock enterprises have successfully packaged tokens in the form of stocks, transforming into shell companies that hold coins. The narrative remains fundamentally about capital, even if the form has changed.

This time, the ones footing the bill are not the people from the crypto world, but the stock investors who once looked at them from afar.

01 What is a coin stock?

Although it is difficult to have a universal concept, coin stock enterprises are generally defined as publicly listed companies that establish one or more cryptocurrency reserves within their operations, bringing cryptocurrency onto their balance sheets. Depending on different criteria, coin stock enterprises can also be categorized into different types, which can be further divided into three categories: based on cryptocurrency types in the treasury, based on business models, and based on the entities constructing the coin stock.

Let’s start with the crypto treasury. The so-called crypto treasury refers to an investment model where companies reserve a certain cryptocurrency. Initially, there was only one category of Bitcoin treasury companies, but later ETH rose to prominence. Currently, with the loosening of regulations, various altcoins and their stocks are emerging one after another, including SOL, BNB, Hyper, XRP, and DOGE, covering a wide range. According to the data, there are already 166 Bitcoin treasury companies, 72 Ethereum treasury companies, while the number of altcoin companies is relatively limited. For instance, the relatively well-known treasury companies for SOL are only DeFi Development, Upexi, and Sol Strategies. As for BNB, it started even later, with only VAPE as the official entry.

Among all the coins, the most well-known company is none other than Strategy. Starting its layout in 2020, Strategy turned the tide through Bitcoin, successfully soaring from a company with a stock price of only 16 dollars, on the verge of bankruptcy, to a Nasdaq 100 company with a stock price close to 400 dollars and a market value of 111.83 billion dollars, creating a successful case for this strategy in the market based on its own experience.

From the essence of strategy analysis, the core of the vast majority of financial enterprises lies in market value premium. Taking Strategy as an example, the company’s valuation model relies on the market value premium rate, increasing BTC holdings through equity dilution financing, and enhancing per-share BTC holdings, thereby driving up the company’s market value. In simple terms, this is achieved by designing the allocation ratio between equity and Bitcoin, purchasing Bitcoin through bonds and selling stocks, and then realizing capital operation through the appreciation of Bitcoin, ultimately constructing a positive flywheel. As of August 10, 2025, Strategy has acquired 628,946 Bitcoins at an average price of approximately $73,288, with a total holding value of about $46.09 billion. Calculated at a Bitcoin price of $119,000, this Bitcoin already has a scale exceeding $74.8 billion, making it the publicly listed company with the most Bitcoin holdings in the world.

02 How Does It Work?

Why would investors accept or even default on the existence of a premium?

First of all, the market’s expectations for cryptocurrencies are a key factor. Only with an optimistic attitude towards the future of cryptocurrencies will they be willing to purchase at a premium; secondly, the emergence of treasury products effectively meets the needs of investors who are unable to directly access cryptocurrencies for various reasons but still wish to gain benefits. This group includes, but is not limited to, outsiders who do not understand cryptocurrencies, some regulated institutions, funds, and legal entities. In other words, treasury products lower the investment threshold for participants, which makes them willing to pay a certain “compliance” premium. Of course, this premium is also based on the continuous rise of cryptocurrencies.

Another noteworthy reason is the unique leveraged operating model of treasury enterprises, which typically raises large-scale funds at very low interest rates, allowing for further expansion of acquisition scale, and even in a market downturn, they can still have strong resistance. According to data from crypto consulting firm Architect Partners, U.S. publicly traded companies have announced plans to raise over $91 billion for the purchase of cryptocurrencies this year.

Where does the money come from?

Looking at the current crypto treasury companies, PIPE ( private placement capital increase ), ATM ( market price capital increase ), CB ( issuing convertible bonds ), and SPAC ( mergers and acquisitions listing ) are the four mainstream fundraising methods. Private placement means selling financial products to specific investors privately through brokers or OTC platforms, which allows bypassing the public market for quick capital recovery; ATM refers to issuing additional shares, selling stocks at the current market price in the public market for cash, typically with a longer cycle and relatively free operation; convertible bonds are more “sly,” as companies borrow money from the market, but this money can be converted into cash or company stocks in the future, creating selling pressure for a longer time; SPAC is relatively well-known, as it obtains funding through reverse mergers. The fundraising leader Strategy initially focused on issuing convertible bonds for fundraising, but in recent years, with soaring stock prices, market price capital increase has become its main method.

Returning to the business model, the business model of coin-stock enterprises falls into two categories. One category imitates Strategy, mainly focusing on holding coins as the primary business, achieving capital appreciation through premiums. In other words, the crypto reserve is the business model. Due to the relatively low entry threshold, this category attracts many follower enterprises. The other category is relatively more rational, adding a treasury segment based on the original business, making cryptocurrency a business supplement. This type of coin-stock is particularly dominated by Ethereum treasury enterprises, because compared to Bitcoin’s value storage, Ethereum also has the basic function of staking for interest.

In fact, the division based on the主体 standard also focuses on the Ethereum treasury enterprises. Within the Ethereum treasury, it can be divided into native camps, with typical cases being SharpLink, and Wall Street camps, with typical cases being BitMine. The difference between the two lies in the holders behind them. SharpLink’s shareholders almost cover the entire chain capital of the Ethereum ecosystem, including native giants like Consensys and Pantera, Arrington, as well as Ethereum derivative asset operators like GSR and Ondo Finance, with holders characterized as native OGs. On the other hand, BitMine is entirely a product of Wall Street, with mainstream US stock structure investors such as Galaxy Digital, ARK Invest, and Founders Fund as its core components. Currently, the arms race between the two in ETH is intensifying, with BitMine leading far ahead due to its more aggressive capital rhythm and CEOs who are better at ‘storytelling,’ successfully raising 83,313 ETH in just 35 days, surpassing SharpLink’s 280,706 ETH, becoming the largest Ethereum treasury company in the world.

03 Do Altcoins Need to Reappear in Coin Stocks?

The surge of coin stocks is quite fierce, and the most direct reason is obviously not just to support cryptocurrencies in such a simple manner. Regardless of how much they play up the emotional narrative of decentralization or pull out various new narratives like cryptocurrency valuation anchors and digital gold, what businesses fundamentally care about is still the straightforward factor of profit.

Among hundreds of coin-stock companies, there are quite a few that chase hotspots. The feedback brought by these hotspots is indeed very timely, and almost all coin-stock companies experience a rapid and substantial increase after officially announcing their involvement. There are many examples; after announcing the financial strategy on May 27, SharpLink’s stock price surged by 433.18% on the same day, reaching $124.12 on May 30, which is more than 24 times the previous low price of $5. On June 27, BitMine’s stock price was $4.26, and on July 3, this price peaked at $135. Compared to the aforementioned two large holders, small-cap stocks also have very considerable short-term gains. A nearly bankrupt Swedish biotechnology company, H100 Group, saw its stock price increase 15 times within a month after announcing support for Bitcoin reserves, and Bluebird Mining Ventures recovered 4 times its stock price through Bitcoin reserves.

From the current situation, after nearly two months of FOMO, the craze for coin stocks seems to be cooling down. Taking Strategy, the largest treasury company for Bitcoin, as a reference, its market cap premium has fallen from a high of 2 times to 1.49 times. Recently, BitMine, which has just topped as the largest buyer of ETH, saw its stock price drop from a peak of 135 USD to the current 62.44 USD. It’s worth noting that ETH is still on the rise, having already surpassed 4600 USD today.

Interestingly, the performance of coin stocks has essentially mirrored the patterns of the crypto market. Consistent with the development of altcoins, coin stocks are also exhibiting a polarized trend. Data from Architect Partners shows that the median return of crypto treasury stocks holding mainstream tokens like Bitcoin, Ethereum, or Solana has been 92.8% since announcing their holding strategy. In contrast, crypto treasury stocks investing in altcoins have seen a median return of negative 24% since announcement. Looking at the most straightforward market data, compared to their peak, almost all altcoin stocks have had their prices cut in half. Taking Hyperion DeFi, which reserves Hyperliquid, as an example, since it changed its name to HYPD and modified its stock code on July 2, its stock price has dropped by 62%.

It can be seen that the nightmare of the altcoin market seems to be reappearing in the coin-stock enterprises. The performance of altcoins is transmitted to the coin-stock enterprises, and due to the leverage effect during this period, when the price performance is poor, the chain reaction it brings is even greater. Investors who bought at high prices can only helplessly stand guard at the peak. Objectively speaking, it is not just the altcoins; with the connection between the coin market and the stock market, the influence of both sides is further amplified.

The emergence of coin stocks essentially creates a new narrative system. For project parties, the existence of coin stock enterprises not only provides buying support, helping to solidify prices, but also serves as a marketing tool to enhance the visibility of tokens. If taken further, project parties can even manage prices through self-built financial reserves, influencing the two-way market through unilateral price increases, colloquially known as “stepping on the left foot while stepping on the right foot.” In an optimistic scenario, this can lead to a situation where price increases and sales occur simultaneously. This phenomenon of stepping on the left foot while stepping on the right foot is vividly demonstrated on ETH, where large institutional buy orders created FOMO, causing ETH to soar by 58% within a month. Perhaps due to such considerations, there are also increasing cases of foundations collaborating with enterprises on financial reserves. For instance, Mill City Ventures III, which initiated the SUI financial reserve, collaborates financially with the SUI Foundation. For most enterprises, coin stocks are not only a way to strategically transform but also a practical means to achieve rapid profits and save their business. Even if it is just to open up new business sectors, it is hard to give up this long-term attention-grabbing opportunity.

From the investor’s perspective, coin stocks allow them to bypass complex wallet operations and compliance barriers, opening up a new avenue for wealth generation in the cryptocurrency space, making their investment portfolio more diversified and potentially yielding higher profits, which is also advantageous.

However, it is not without negative effects. At present, the core of the treasury is the value support and long-term trend of the cryptocurrency itself. In this regard, apart from BTC, which has been embraced by institutions, other coins, including ETH, lack relative certainty. Once a downward cycle begins, market prices will plummet, and coin-stock companies will face a double whammy. The drop in coin prices will lead to a fall in stock prices, and selling coins will further drive down coin prices, especially as most coin-stocks are purchased with borrowed funds, presenting significant potential risks. After the introduction of cryptocurrencies, the primary concern for coin-stock investors is to face greater volatility, as the fluctuation curve of tokens is much more thrilling than a roller coaster.

Overall, although coin stocks are still thriving, the long-term development prospects for most companies are unclear, especially for those centered around altcoins, which face more realistic challenges under the premise that the altcoin season is difficult to replicate. From the perspective of market structure, among mainstream currencies, leading companies with large market capitalization are expected to gain more industry dividends, presenting a winner-takes-all pattern to some extent. In the altcoin sector, there is greater reliance on the project teams’ resource linkage capabilities; altcoin stocks that have official involvement or resource endorsements carry certain positive expectations. However, it is certain that most companies that have rushed into the market will inevitably face a thorough cleansing at some point.

For an ordinary member of the cryptocurrency community, rather than the vague experience of buying stocks, directly buying coins might be the best choice.