Has the bitcoin treasury company bubble popped?
The post Has the bitcoin treasury company bubble popped? appeared on BitcoinEthereumNews.com.
In April, a new fad emerged after MicroStrategy (MSTR) founder Michael Saylor laid the groundwork for a new type of public stock corporation, the so-called “bitcoin treasury company.” Like any fad on Wall Street, early adopters earned disproportionate gains ahead of the herd of trend followers. However, the fad is already fading as investors are beginning to tire of overpaying for publicly-traded balance sheets. An acronymic play on bitcoin’s BTC symbol and modeled after MicroStrategy itself, these bitcoin treasury companies promised to upend the traditional investment framework of discounted cash flow analysis. Instead of boring corporate activities like building products and services for paying customers, they would mostly skip over such bothersome details to focus on something much more exciting: raising capital to buy BTC. Bitcoin treasury company season begins On April 23, Bitcoin Treasury Company Season kicked off in earnest with the launch of Twenty One, a Tether- and Bitfinex-led partnership with Jack Mallers and ex-Howard Lutnick’s Cantor Fitzgerald. Publicly traded Cantor Equity Partners, which will soon re-name itself Twenty One, told the world on that date that it intended to acquire 42,000 BTC. Within six days of the news of that ambitious plan, Cantor Equity Partners rallied from $12.52 to $59.75 per share. Bitcoin treasury companies scrambled to get their acts together. Next up, Vivek Ramaswamy’s Asset Entities published a May 7 press release about buying up to $1 billion worth of BTC. On that headline, shares rallied from $1.73 to $8.92 within two business days — and all the way to $13.42 within 11 business days. Finally, peak mania arrived on May 12 with David Bailey’s Nakamoto. Within a single pre-market session, shares traded to 23X its anticipated BTC holdings. Soon, mid- and lower-tier stocks began to try to catch a spark from the embers of those…
