Adam Back: Bitcoin Treasury Adoption Creates Speculative Opportunity
Adam Back, co-founder and CEO of Blockstream and inventor of Hashcash, has characterized the recent surge in corporate Bitcoin treasury adoption as “the new altcoin season” (ALT SZN) for cryptocurrency speculators, advocating for a pivot towards Bitcoin or BTC-focused stocks.
Understanding Bitcoin Treasury Firms
Bitcoin treasury firms acquire large quantities of Bitcoin, often “on repeat,” to increase Bitcoin holdings on their balance sheets. This strategy aims to boost their share price and attract investors, utilizing various funding sources like convertible note offerings. These companies effectively concentrate Bitcoin exposure into tradable stocks.
The phenomenon has gained significant traction recently. According to data from BitcoinTreasuries.NET, the number of public companies holding Bitcoin on their balance sheets has doubled since June 5, with a current total of at least 240 firms holding the cryptocurrency. This represents approximately 3.96% of the total Bitcoin supply.
Driving Institutional Adoption
Back believes the current wave of corporate adoption signals an opportunity, especially for speculators looking to offset potential losses in the altcoin market, or “ALTS,” a term often used in crypto communities to refer to a diverse range of alternative cryptocurrencies. He suggested that speculators should consider “dumping ALTs into BTC or BTC treasuries.” This sentiment comes as institutional and government adoption is seen by some as potentially driving Bitcoin’s market cap significantly higher.
Previous analysis by Back, cited in the piece, suggested institutional and government adoption could present a market opportunity of $200 trillion. He views Bitcoin treasury firms as potentially front-running the theoretical concept of “hyperbitcoinization,” where Bitcoin could become the world’s dominant global currency, surpassing fiat money due to its supply limitations compared to traditional currencies.
Premiums and Shareholder Concerns
While corporate Bitcoin treasuries attract investor interest, growing concerns are being raised regarding shareholder value. A notable example highlighted in the piece is Japanese investment firm Metaplanet, where its Bitcoin premium reached an unusually high $596,154. This premium indicates that shareholders are effectively paying significantly more than the underlying Bitcoin value for the stock.
Further Corporate Commitments
Bitcoin treasury adoption continues its rapid pace. On June 12, Nasdaq-listed Mercury Fintech Holdings announced a plan to raise $800 million specifically to bolster its Bitcoin treasury. Three days prior, the European cryptocurrency company The Blockchain Group based in Paris secured funding for its own corporate Bitcoin treasury, further demonstrating the expanding geographical and institutional reach of this trend.
