Businesses are bingeing on crypto, dialing up the market's risks
Buying bitcoin is becoming a fad for a growing list of companies that have nothing to do with crypto but believe digital assets can boost their stocks.
The problem, some industry insiders say: This could expose crypto to new risks, amplifying selloffs in moments of turbulence.
The approach has been pioneered by executives such as bitcoin evangelist Michael Saylor, who has turned his software company Strategy into a warehouse for the digital currency. Other companies are following suit.
About 60 companies with no previous ties to the market are now pursuing the 'bitcoin treasury strategy," according to Standard Chartered Bank, citing data from BitcoinTreasuries.net. They make software, and offer marketing and healthcare services. Some aren't just buying bitcoin, but are piling into smaller tokens such as ether, solana and XRP.
Some industry players argue these companies are courting disaster. For one, they say, digital assets have a history of volatility. If the price of bitcoin or another crypto token were to fall sharply, the selloff might also pull down the value of a company's stock. More troubling, though, is that a steep decline might also compel companies to sell their tokens—accelerating the selloff—especially if they borrowed heavily to acquire their crypto in the first place. For students of financial history, it is a familiar refrain.
'We haven't seen this type of capital activity in any crypto-related strategy within this short amount of time potentially in the history of our industry," said Elliot Chun, a partner at advisory firm Architect Partners. 'We just have to be careful because it is great on the way up, but when it is on the way down, it's going to be violent."
These purchases (or, for many, the mere announcement of these plans) often send the companies' share prices flying. At least half a dozen companies laid out their crypto treasury plans last week alone. And with bitcoin trading near its record high and President Trump's emergence as one of the crypto industry's staunchest supporters, the numbers should continue to grow, bankers and analysts say.
All of this newfound interest in loading up on crypto has Wall Street's attention, with bankers now racing to help finance companies' purchases of tokens.
On June 2, a sports-betting marketing company called SharpLink Gaming said it had closed a $425 million private placement led by blockchain company Consensys Software, to become the largest public corporate holder of ether. The announcement, however, sent shares of Nasdaq-listed SharpLink, which is based in Minneapolis, down 28%.
The next day, a Canadian renewable-energy company called SolarBank fared better. Its stock closed up more than 1% after announcing its bitcoin treasury strategy. Then, on Wednesday, shares of K-pop media firm K Wave Media surged more than 130% after the company revealed plans to sell up to $500 million worth of stock to acquire bitcoin.
Last week's announcements bring the total capital intended for the crypto treasury strategy to about $11.3 billion since the start of April, according to data from Architect Partners. That includes the plans by President Trump's media company to raise $2.5 billion from investors to buy bitcoin and the debut of Twenty One Capital—a bitcoin-accumulation company backed by Tether and SoftBank.
Trump Media and Technology Group, the social-media firm controlled by the president's family, said last week it sold more than $1.4 billion worth of shares and $1 billion of zero-coupon convertible debt to finance its bitcoin purchases in what it called the 'one of the largest bitcoin-treasury deals for any public company." The company also filed a registration statement with regulators, which would allow it to issue up to $12 billion of stock, debt and other securities.
World Liberty Financial, the Trump family-backed crypto venture, also revealed plans on Friday to buy 'a substantial position" in the president's memecoin for the company's 'long-term treasury," according to the president's son Eric Trump.
Their timing matters. The recently converted are likely to buy bitcoin and other tokens at much higher prices than earlier adopters such as Strategy. For instance, if bitcoin were to fall below $90,000 (just 15% below its current price of $106,000), the crypto holdings of some 30 public companies would be underwater, according to Geoff Kendrick, global head of digital assets research at Standard Chartered Bank.
Companies adopting a crypto treasury strategy solely to boost share prices face even greater peril. Many stock investors are seeking quick gains and are likely to flee if prices plunge after a macroeconomic event, or if cybercriminals strike, said Architect Partners' Chun.
'The moment things start getting ugly, they don't have an incentive to stay," he said.
Still, some analysts contend that not all crypto treasury companies are the same. Enterprises led by prominent industry figures are better positioned to withstand a downturn than businesses merely trying to ride bitcoin's momentum, according to Brett Knoblauch, head of digital asset research at Cantor Fitzgerald.
He pointed to Strategy's Saylor and Twenty One Capital's Jack Mallers as the type of personalities that could continue to drive interest into their bitcoin treasury companies.
'With interest comes trading volume, with trading volume comes the ability to raise money, with the ability to raise money comes the ability to buy more bitcoin, that is the flywheel," said Knoblauch. 'There's a lot of zombie companies that might be buying bitcoin and trying to do the same thing, but it is going to be tough without the flywheel."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Wire
24 minutes ago
- The Wire
Ahead of G7 Summit, Canada Lists ‘Foreign Interference and Transnational Crime' as Key Priority
Menu हिंदी తెలుగు اردو Home Politics Economy World Security Law Science Society Culture Editor's Pick Opinion Support independent journalism. Donate Now World Ahead of G7 Summit, Canada Lists 'Foreign Interference and Transnational Crime' as Key Priority The Wire Staff 7 minutes ago Last week, Prime Minister Modi announced that he had received and accepted the invitation to attend the G7 summit. It was an unusually late invitation, considering other non-G7 states had got it by the first half of May. Canada Prime Minister Mark Carney. Photo: AP/PTI Real journalism holds power accountable Since 2015, The Wire has done just that. But we can continue only with your support. Contribute now New Delhi: Canada has identified countering 'foreign interference and transnational crime' as a key priority for the upcoming G7 Summit, which Prime Minister Narendra Modi is set to attend after accepting a late invitation last week. Unveiling the host country's agenda ahead of the summit's opening on June 15, Prime Minister Mark Carney outlined three 'core missions.' The first, titled 'Protecting our communities and the world', includes strengthening peace and security, coordinating efforts to combat forest wildfires and, notably, 'countering foreign interference and transnational crime'. The second priority focuses on 'building energy security and accelerating the digital transition' by strengthening supply chains for critical minerals and leveraging artificial intelligence. Carney also said Canada would seek 'securing the new partnerships in the future' aimed at unlocking large-scale private investment to develop resilient infrastructure, generate better-paying jobs and expand access to competitive, high-growth markets. As the Canadian media observed, these outlined 'core missions' are aligned to Carney's domestic agenda. It remains unclear how prominently Canada's stated priorities will feature in the G7 summit discussions, but traditionally, the host nation's agenda tends to receive significant emphasis in the summit's joint declaration. Canada's emphasis on foreign interference and transnational crime also carries particular diplomatic weight. Ottawa has been outspoken about attempts by foreign governments to meddle in its domestic affairs – especially election processes. The pairing of 'foreign interference' with 'transnational crime' was also seen as a signal that Ottawa is referring to efforts by foreign governments to target individuals on Canadian soil. Last Friday, Prime Minister Narendra Modi announced that he had received and accepted the invitation to attend the G7 summit during a phone call with the Canadian prime minister. It was an unusually late invitation, as it was just over a week before the summit was to begin, while other non-G7 states, like Mexico, Brazil, Ukraine and South Africa had got their invitation by the first half of May. Carney's invitation to India has drawn some domestic criticism, forcing him to clarify the decision publicly. 'We have now agreed, importantly, to continued law enforcement dialogue,' he said. 'There's been some progress on that, which recognises issues of accountability. I extended the invitation to Prime Minister Modi in that context, and he has accepted.' Among the G7 outreach invitees, India is the only country whom the host, Canada has accused of both 'foreign interference' and involvement in 'transnational crime'. Ties between India and Canada nose-dived in September 2023 after then-Prime Minister Justin Trudeau accused Indian government agents of being involved in the killing of a Canadian citizen, Hardeep Singh Nijjar, whom India had labelled as a Khalistani terrorist. New Delhi firmly rejected the charge, arguing instead that the real concern was Canada's tolerance of groups it considers anti-India and separatist in nature. In October 2024, Royal Canadian Mounted Police Commissioner Mike Duheme alleged that Indian officials were linked to a wider effort to intimidate or target Canadian nationals. The diplomatic rift deepened when Ottawa expelled six Indian diplomats, including High Commissioner Sanjay Kumar Verma. India reciprocated, prompting a further freeze in official engagement. Besides, a public inquiry led by Justice Marie-Josée Hogue into foreign meddling later identified China and India as key actors attempting to influence Canadian political processes. In its January 2025 report, the commission noted: 'Intelligence holdings also reveal that a government of India proxy agent may have attempted to clandestinely provide financial support to candidates from three political parties in 2021,' adding that 'the source of any such financial contribution could have been unknown to the candidates.' Responding to the report, India's Ministry of External Affairs issued a sharp statement that it was Canada that had been 'consistently interfering in India's internal affairs.' The ministry also claimed that such interference had encouraged 'illegal migration and organized criminal activities'. In the run-up of the snap parliamentary polls in April that was won by Carney, a senior Canadian intelligence official said in a public briefing that India, along with China, has the potential to interfere in the country's upcoming general elections next month. Meanwhile, Indian officials are working against the clock to finalise logistics for the prime minister's visit, rushing to obtain visas and secure accommodation for the delegation on short notice. The Indian team is also preparing for possible confrontations from pro-Khalistani groups, despite protest zones being restricted to three designated areas away from the main summit venue. In addition, Indian diplomats are hurriedly coordinating two stopovers for Prime Minister Modi's travel to and from Canada. On the outbound leg, he will transit through Cyprus, marking the first visit by an Indian prime minister to the country since 2002. On the return journey, Modi is scheduled to pass through Croatia, a visit that was originally planned as part of last month's Europe tour but had to be cancelled following the Pahalgam terror attack. The Wire is now on WhatsApp. Follow our channel for sharp analysis and opinions on the latest developments. Make a contribution to Independent Journalism Related News Canada Placed Law Enforcement Conditions Before Modi for G7 Summit Invite: Report Marking Turnaround in Ties, Modi Accepts Late Canadian Invitation to Attend G7 Summit Next Week As the G7 Clock Ticks, Silence over India's Invite and What it Means Nijjar & After: Facing Flak, Canadian PM says Progress in 'Accountability' Paved Way for Modi G7 Invite India's Disastrous Isolation Around the World As India and Canada's Foreign Ministers Speak Over Phone, Signs of a Further Thaw in Ties Has Development in Northeast India Undermined Its Environmental Sustainability? Israel Allows Limited Aid To Enter Gaza; France, UK, Canada Call Move 'Wholly Inadequate' G20 Is Too Elite. There's a Way To Fix That Though – Economists View in Desktop Mode About Us Contact Us Support Us © Copyright. All Rights Reserved.
Time of India
2 hours ago
- Time of India
dow jones today: US stock market today: S&P 500 flat, Dow Jones down, Nasdaq‑100 up— biggest gainers, losers as Wall Street eyes US-China trade talks and potential tariff deal
How are the major indices performing? S&P 500 (SPY): Sitting steady at about 599.15, virtually unchanged from the previous close, remaining just under the 6,000 mark. Sitting steady at about 599.15, virtually unchanged from the previous close, remaining just under the 6,000 mark. Dow Jones Industrial Average (DIA): Dropping roughly 0.21% to 427.47, reflecting some investor caution. Dropping roughly 0.21% to 427.47, reflecting some investor caution. Nasdaq-100 (QQQ): Climbing around 0.16% to 530.77, fueled by strength in the tech sector. Which stocks are making the biggest moves? Warner Bros Discovery: Surging 7-9% following news of a company split. Surging 7-9% following news of a company split. IonQ: Up about 3% after announcing an acquisition of Oxford Ionics. Up about 3% after announcing an acquisition of Oxford Ionics. Merck: Rising 1.1%, boosted by positive trial results. Rising 1.1%, boosted by positive trial results. Nvidia: Gaining between 1.3% and 2.3%, riding the wave of AI enthusiasm. Gaining between 1.3% and 2.3%, riding the wave of AI enthusiasm. Qualcomm: Jumping 4.4% on completion of its Alphawave IP purchase. Jumping 4.4% on completion of its Alphawave IP purchase. Apple: Adding 0.7%, supported by new AI features unveiled at the WWDC event. Robinhood: Dropping 7.4% after being excluded from the S&P 500 index. Dropping 7.4% after being excluded from the S&P 500 index. Tesla: Down between 0.3% and 2%, impacted by a recent downgrade and fallout from Musk-related news. Down between 0.3% and 2%, impacted by a recent downgrade and fallout from Musk-related news. EchoStar: Falling 8.2% amid bankruptcy rumors. Why are the US and China meeting now — and what's at stake for the stock market? ADVERTISEMENT What's driving the stock market recovery in 2025? ADVERTISEMENT Are tariffs still in effect, and why does it matter now? ADVERTISEMENT Could US-China trade deals shape the next market trend? What's driving the market today? Trade talks between the U.S. and China in London continue to shape investor sentiment, contributing to the Dow's decline and a slight Nasdaq boost. in London continue to shape investor sentiment, contributing to the Dow's decline and a slight Nasdaq boost. Inflation concerns remain front and center , with traders awaiting this week's CPI and core PCE data releases. Expectations suggest the Federal Reserve may hold interest rates steady for now. , with traders awaiting this week's CPI and core PCE data releases. Expectations suggest the Federal Reserve may hold interest rates steady for now. Sector trends show technology stocks powering the gains, while healthcare lags behind. What should investors watch next? FAQs: The US stock market opened slightly weaker on Monday, June 9, as Wall Street turned its attention to critical trade talks between the United States and China. Early trading saw the Dow Jones Industrial Average fall by 185 points, or about 0.5%, marking a cautious start to the week. The S&P 500 dipped 0.1%, while the Nasdaq Composite edged up slightly by 0.1% around 9:35 a.m. Eastern are closely watching the developments in London, where senior officials from both countries are meeting to ease long-standing trade tensions. The discussions aim to address a range of economic disputes and possibly roll back mutual tariffs that have been weighing on global supply chains for week's US-China trade talks are seen as pivotal for the global economy. Tariffs imposed in past years have disrupted everything from electronics to heavy equipment. Though those tariffs are currently paused, no permanent deal has been believe that progress in these talks could help avoid a potential economic slowdown or even a recession, especially if they result in the reduction or removal of tariffs on both sides. A positive outcome could also reignite investor confidence and fuel another leg up in the US stock market modest moves reflect investor hesitancy. Market players are clearly waiting for concrete news before making big decisions. The S&P 500 remains just 2.5% below its all-time high, buoyed by hopes that the US may reach trade agreements that roll back tariffs major factor behind the stock market's strong recovery has been the belief that President Donald Trump will reduce trade barriers as part of broader global deals. After plunging by nearly 20% from its peak two months ago, the S&P 500 has made a swift optimism is largely driven by expectations that smoother trade relations — particularly with major economies like China — will relieve pressure on multinational companies and bring stability back to supply both the US and China have put a pause on new tariffs, but existing ones remain. These tariffs have cost industries billions, increased consumer prices, and created uncertainty for global important now is whether these paused tariffs are finally lifted. This could significantly improve the flow of goods, lower costs, and potentially lead to more business investments, especially in sectors like tech, agriculture, and Any meaningful breakthrough in US-China trade negotiations could serve as a key catalyst for markets. Investors are looking for long-term clarity, not just temporary Monday's talks in London show signs of real progress, we could see increased investor confidence, reduced market volatility, and fresh momentum across Dow Jones, S&P 500, and without a deal, continued uncertainty could weigh on the markets in the coming should keep a close eye on the statements or outcomes from the US-China meetings. Any mention of progress on tariff rollbacks, trade agreements, or economic cooperation could trigger immediate market also worth noting that the Federal Reserve's next move, broader economic indicators, and the 2024 US election climate remain in focus as secondary factors influencing the market Dow Jones dropped due to investor caution ahead of the US-China trade talks aim to ease tariffs and settle long-running trade disputes affecting the global economy.
New Indian Express
2 hours ago
- New Indian Express
Jio BlackRock AMC announces leadership team, unveils digital-first investing platform
MUMBAI: Jio BlackRock AMC, the mutual fund arm of Jio Financial from the Reliance Group, has appointed the key leadership team with COO and a slew of other key positions. The company has also invited interested parties to register their interest in the AMC's digital-first offering. Jio BlackRock Asset Management is an equal joint venture between Jio Financial and the NYSE-listed BlackRock. Sid Swaminathan was appointed as the managing director and chief executive of JioBlackRock AMC when the company got the Sebi approval. The other key appointments include Gaurav Nagori, the chief operating officer; Amit Bhosale, the chief risk officer; Amol Pai, the chief technology officer; Biraja Tripathy, head of products; Disha Bhandary, head of human resources; Hemanti Wadhwa, head of legal, compliance and secretarial, chief compliance officer and company secretary; and Komal Narang as the chief client officer, the company said in a statement Monday. On the digital-first offering, which gives a preview of the value proposition as well as educational content, Swaminathan said on signing up, individuals can access material on the fundamentals of investing and other functions that will allow them to invest once the offering is launched. The early access empowers individuals with the knowledge to make informed investment choices, a company statement said. Over the coming months, JioBlackRock AMC intends to launch a range of investment products, including those that apply BlackRock's industry leading capabilities in data-driven investing, he added. Responding to the developments, the shares of Jio Financial rose nearly 4%, while benchmarks rose for the fourth day, adding around 35 bps over the Friday closing.
