In France, all companies listed on the tightrope or lacking a business model seem to want to become "Crypto Treasury Companies." However, this is not a French phenomenon. It's actually a global contagion, encouraged by the Trump administration's endorsement of crypto, as noted by the Financial Times in a major article on the subject this morning. Biotech companies on life support, hoteliers desperate for customers, and even vape manufacturers have suddenly discovered a new vocation as bitcoin safes. The playbook is simple: raise millions (or even billions) in debt and capital, turn it into tokens, repaint the website orange, and publish the size of the hoard in real time. Bonus: in some countries, this is fiscally smarter than holding crypto directly. The result: valuations skyrocket, sometimes to double the real value of the assets, and investors applaud as long as the BTC curve climbs.
The parallel with the internet bubble of 1998 is obvious: yesterday, companies added ".com" to their names to attract investors; today, they are buying bitcoin by the pallet load. The mechanics are the same: speed of accumulation = stockmarket premium. Except that behind the scenes, the balance sheets often look grim: abysmal operating losses, ancillary core businesses, and total dependence on an asset whose value is based on the collective belief that it will continue to rise. In this model, the company is no longer a producer of goods or services, but rather a listed vehicle for speculating on an ultra-volatile asset. And to keep the machine going, it needs to raise more and more funds to buy more and more tokens.
The problem is that this pyramid is based on a crypto market that only makes sense when everything is going well. If prices plummet, the domino effect could be violent: share devaluation, forced sales to repay debt, pressure on the entire ecosystem. Even some players in the sector acknowledge that the end could be brutal. However, as always in this type of bubble, the killer argument remains: "let's enjoy it while it lasts".
There are many examples. Since the beginning of the year, 154 listed companies have already raised funds or committed to doing so for nearly $100 billion to buy digital assets, the vast majority in bitcoin. Before this year, only 10 companies had done so. Among them, Sequans Communications, a New York-listed semiconductor manufacturer, whose share price soared 160% after raising $384m to build up a bitcoin reserve. In the UK, The Smarter Web Company, a modest website designer, has a market capitalization of £560m for £93,000 in profits... but £238m in bitcoin in the bank. The same mechanism is at work at US company KULR Technology, valued at $211m, while its business burns through cash: the company holds $118m worth of bitcoin.
The figurehead who started this trend is Michael Saylor. Since 2020, the businessman has transformed his company Strategy (formerly MicroStrategy) into a digital safe. His company has bought billions of dollars worth of bitcoin in weekly transactions. Saylor takes advantage of this to preach the gospel of his strategy at conferences. And it's working, as his company is now worth almost twice the value of its bitcoin holdings. Its market capitalization has reached $115bn. Investors are paying for the leverage and the promise of new acquisitions.
Tax breaks also play a role. In Japan, for example, holding cryptocurrencies can cost up to 55% in capital gains tax. This compares with just 20% for stocks. In Brazil, it is 17.5% versus 15%. Buying shares in a "crypto treasury company" thus becomes a completely legal way to gain exposure to the rise of bitcoin at a lower tax cost.
But recent history shows that the market has no patience. Those who don't grow their fortunes fast enough are punished: Sequans, once again, is now trading below its pre-crypto level. For the plan to work, the speed of accumulation is just as important as the total volume, the storytelling behind these purchases, and the marketing discourse surrounding them.
