Written by: Jessy, Golden Finance
The "Microstrategy" trend of altcoins began to rise in May 2025.
Companies imitating Microstrategy with altcoins like ETH, TRX, SOL, XRP, DOGE, and BNB have sprung up like mushrooms after rain.
Unlike Microstrategy's singular strategy of issuing convertible bonds to purchase Bitcoin, the operational path for these altcoins is roughly as follows: the stakeholders behind these altcoins buy a shell company on the US stock market and then announce the purchase of a certain token as a reserve. Both stock prices and token prices will experience a surge in the short term.
However, after a brief stock price frenzy, these altcoins' Microstrategy approaches have all faced stock price declines. For instance, the stock price of Ethereum's Microstrategy Sharplink peaked at nearly $80 per share after the announcement, but is now below $20 per share. Currently, Bitmine, the largest institutional holder of Ethereum, reached a high of $135 per share on July 3, but is now only $34 per share. Similarly, BNB's Microstrategy CEA Industries surged to a high of $57 on July 28, but has now fallen back to $35.
These altcoins' Microstrategies, by issuing additional shares to inflate market value, raise funds to purchase corresponding altcoins, essentially use the continuous dilution of common stock shareholders' equity to provide cash flow for token accumulation. With substantial funds to support their prices, the token prices are continuously driven up, allowing large holders of the altcoin to sell at high prices, while retail investors who follow suit often buy at the peak of stock prices, becoming the ultimate payers in this feast.
The Surge in Stock Prices and Subsequent Cuts
Since May 2025, several companies related to mainstream altcoins have successively replicated the "Microstrategy" model in the US stock market. Their common operational path is: first control a shell company in the US stock market, then announce the purchase of a certain token as a "strategic reserve," subsequently raising funds through stock price increases, and then using the financing to accumulate tokens, attempting to establish a flywheel structure linking token prices with company valuations. In reality, this is merely a common game in the financial world of stepping on one's own feet.
The Ethereum version of "Microstrategy," Sharplink Gaming (SBET), saw its stock price soar to nearly $80 after announcing the purchase of ETH, but is now left with less than $20; Bitmine, which holds the most Ethereum, also peaked at $135 in early July, but has now dropped back to $32.
TRON achieved its listing through a reverse merger with a Nasdaq-listed company named SRM Entertainment, which was subsequently renamed Tron Inc. The specific investment involved a $100 million investment in TRX tokens into SRM Entertainment, which plans to store this TRX in the company's treasury, establishing a "TRX reserve" model. After the announcement, SRM Entertainment's stock price skyrocketed by 533% on June 16, rising from $1.45 to $9.19, with an intraday high of $10.83, and is currently stabilizing around $9.
Even DOGE has its own "Microstrategy": this July, Nasdaq-listed company Bit Origin announced it had raised $500 million (of which $400 million came from equity financing and $100 million from debt) to establish a DOGE treasury, while another listed company, Thumzup Media, had already been approved to establish a $250 million cryptocurrency treasury including DOGE before Bit Origin. Currently, the former's stock price has already been cut in half from its post-announcement high.
The most closely watched recently is BNB's Microstrategy. First, CEA Industries (VAPE) (invested by YZi Labs) announced on July 28 that it would conduct a $500 million public equity private investment (PIPE), which includes $400 million in cash and $100 million in cryptocurrency, as well as potential proceeds of up to $750 million from warrants. The company plans to use these funds to create a BNB Chain (BNB) cryptocurrency treasury. After the announcement, the stock price soared from $8.9 to $57, only to sharply retreat to around $40 the next day, and is currently at $35; another company, Chinese microchip firm Nano Labs (NA), announced at the end of June that it would purchase $1 billion in BNB through the issuance of $500 million in convertible bonds, intending to hold 5-10% of the circulating supply long-term. Following the announcement, the stock price doubled to around $15, but has now fallen to around $6.
Who is Paying for the Accumulation Strategy of Altcoin Microstrategies?
On the surface, these altcoin projects replicating the Microstrategy operational logic seem to use cryptocurrency as reserves, reflecting their belief in the long-term value of blockchain. However, in reality, this is a packaged capital game, where the core is not to create value but to artificially bind token prices with stock prices, creating a temporary illusion of market value through rounds of share issuance.
Its operational logic is quite clear: project parties or controlling shareholders manipulate listed companies to issue announcements about holding tokens, simultaneously stimulating speculative sentiment in both the crypto and US stock markets, driving up stock prices; then, through targeted share issuances (ATM, PIPE, convertible bonds, etc.), they obtain financing to repurchase related tokens. The key to this operation is rhythm control—rising token prices drive stock prices, rising stock prices create financing space, and once financing is completed, it further pushes up token prices, allowing the flywheel to continue spinning.
However, the problem is that all of this is built on emotion and valuation, lacking intrinsic value support. Tokens themselves do not generate cash flow, and companies cannot stabilize profits from holding tokens. The financing brought by share issuance is essentially a trade-off for short-term liquidity by diluting common stock shareholders' equity, achieving "exchanging shares for tokens."
When enthusiasm wanes, token prices stop rising, or financing capabilities are limited, this structure can collapse rapidly. Token prices and stock prices begin to decouple, the financing window closes, and companies can no longer maintain their accumulation and support of tokens. Altcoins lose their largest buyers, and the market value bubble bursts.
Meanwhile, those investors who bought company stocks at high points become the ultimate payers in this false prosperity. The danger of this model lies in its transfer of the risks of crypto assets to the stock market, forming a cross-market Ponzi scheme: emotional news drives stock prices, stock prices drive financing, financing drives token purchases, and token prices rise.
Once the chain breaks, the collapse comes even faster. First, if token prices fall below the company's average acquisition cost, the company's balance sheet deteriorates rapidly. Additionally, such operations currently exploit regulatory loopholes due to regulatory lag; when regulations halt this financing-to-buy-token model, undoubtedly, both stock and token prices will bleed profusely. Perhaps more foreseeably, when the wave of emotion and capital withdrawal occurs, prices will drop—not in a rapid spiral to zero like Luna, but stock prices will find it difficult to return to their peaks. By then, the flywheel will no longer turn, leaving only a mess of market value and a group of ignorant investors who bought in at high points.
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