Cryptocurrency treasury companies are beginning to see stock prices rise through stock buyback programs, with analysts suggesting this may indicate that these companies are now fighting for credibility.

Media company Thumzup, associated with Trump’s younger son, holds Bitcoin (BTC) and Dogecoin (DOGE). The company announced on Wednesday that it would increase its stock buyback from $1 million to $10 million, resulting in a 7% increase in its stock (TZUP) on the day, followed by an additional 0.82% rise to $4.91 in after-hours trading.

Meanwhile, Solana treasury company DeFi Development Corp (DFDV) expanded its stock buyback from $1 million to $100 million, with its stock rising over 5% and then stabilizing at more than a 2% increase, followed by a 1% rise to $15.50 in after-hours trading.

Previously, Coinbase's head of research David Duong and researcher Colin Basco predicted in a report on September 10 that publicly traded companies buying cryptocurrency are entering a "player versus player" mode, competing more fiercely for investor funds.

Ryan McMillin, Chief Investment Officer of Australian crypto investment management firm Merkle Tree Capital, told Cointelegraph that stock buybacks indicate that the competition among crypto treasuries is starting to turn into a "credibility competition."

"Simply saying 'we hold Bitcoin' is no longer enough. Investors want to see professional capital allocation—buybacks, dividends, clear treasury strategies," he said.

However, not all crypto treasury companies that committed to buybacks benefited. TON Strategy Company (formerly Verb Technology Company) took similar action on September 12, but its stock (TONX) did not respond positively, instead falling by 7.5%.

McMillin stated that stock buybacks represent a "classic confidence signal," which is important for publicly traded crypto treasury companies when they believe their stock is undervalued, as "their valuations often fluctuate at a premium or discount relative to their Bitcoin holdings (mNAV)."

"Buybacks can narrow this gap by reducing the number of shares outstanding and demonstrating discipline—investors will reward this. Prices may also rise as traders seek to front-run a significant amount of demand. Buying more Bitcoin increases volatility exposure," he said.

Meanwhile, Kadan Stadelmann, Chief Technology Officer of the blockchain-based Komodo Platform, told Cointelegraph that when companies use cash reserves to buy back stock, the publicly available shares decrease, leading to scarcity and upward price pressure.

"Crypto treasury companies are competing to see who can create the most attractive treasury structure, but what we are seeing is super Bitcoinization, which is a form of de-dollarization—Bitcoin against the dollar," he said.

Bitbo is tracking companies that have added Bitcoin to their balance sheets, holding over 1.4 million Bitcoins, approximately 6.6% of the total supply.

Michael Saylor's company leads with 638,985 Bitcoins and continues to purchase regularly. Some analysts suggest that the market for companies buying cryptocurrency is saturated, and not all companies will survive in the long term.

Stadelmann believes that the "crypto asset treasury phenomenon" will not slow down in the short term, as "more and more companies will allocate part of their treasury to Bitcoin and other crypto assets, including Fortune 500 companies."

Related: Profit-taking indicators surge as Bitcoin (BTC) bull market cycle enters "late stage"

Original article: “The Crypto Treasury Race Escalates: Stock Buybacks Become a New Weapon in the 'Credibility Competition'”

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