Cryptocurrency Buying Spree Reaches $7.8 Billion Weekly High as Corporates Pour in

Crypto treasury firms initiated transactions accumulating nearly $7.8 billion worth of cryptocurrencies this week, signaling one of the largest corporate investments in the sector, particularly focused on altcoins.

Corporate Interest in Ethereum Dominates

An analysis by Cointelegraph of 16 company statements since Monday revealed plans for crypto purchases or fundraising. Ethereum (ETH) emerged as the primary target.

At least five publicly traded companies have committed to purchasing over $3 billion in ETH. This volume exceeds the amount of ETH issued over the past week by approximately 45 times.

Bitfury Group, trading as BTCS Inc., filed plans Tuesday to raise capital to fund potential ETH purchases. Similarly, ConsenSys co-founder Joseph Lubin’s venture, Sharplink Gaming, added $338 million worth of ETH. Etherpunks’ acquisition of 15,000 ETH for $57 million further illustrates the demand.

Altcoins Attract Significant Corporate Attention

Altcoins also attracted substantial corporate interest. Tron Inc., led by Justin Sun, announced intentions to raise $1 billion to acquire its native TRX token.

Several companies signaled plans to acquire either Solana (SOL), Sui (SUI), or Binance’s native BNB. The formation of CEA Industries, backed by Binance’s Changpeng Zhao, as a primary BNB buying entity, following a $425 million deal, underscored Zhao’s influence. Additionally, Mill City Ventures III finalized a $450 million deal focusing on Sui, while Cemtrex Inc. purchased $1 million in SOL.

Market Scale and Risk Factors for Crypto Treasuries

Galaxy Research estimates that crypto treasury companies collectively hold over $100 billion in assets, largely Bitcoin, accounting for $93 billion of this total.

However, the reliance on significant equity premiums poses risks. Different companies apply varying “widely different” equity premiums to their net asset value, as highlighted. For instance, Michael Saylor’s Strategy employs a premium of 58%, while Japan’s Metaplanet relies on a notably higher 179%. Analyst Will Owens warns that persistent equity premiums are critical for these models. A collapse or reversal of this premium, or widespread investor sentiment shifts, could threaten the stability of these firms.

Furthermore, Owens notes the growing popularity of similar investments, stating, “The treasury company trade is becoming increasingly crowded,” which could lead to structural vulnerabilities.

Continued Focus on Bitcoin

Despite the significant ETH activity, Bitcoin remained a popular choice, with seven companies collectively proposing or executing purchases totaling $2.7 billion. MicroStrategy (now Strategy), via a $2.5 billion funding round, acquired 21,021 Bitcoin. Other notable buys included The Smarter Web Company’s purchase of 225 BTC and Metaplanet’s acquisition of 780 BTC.

The ongoing influx of capital into crypto treasury firms highlights a persistent trend in institutional adoption, but simultaneously underscores the reliance on sustained equity premiums and generally favorable market sentiment.