Strategy's first Bitcoin sale since December 2022 marks another turning point in the nearly two-year-long expansion of the "crypto treasury" trading. As the crypto market has retreated from its October highs, more and more companies relying on issuing shares and bonds to buy cryptocurrencies have slowed down, and the number of companies still continuously increasing their holdings has significantly decreased.
Strategy ends continuous share purchases
CoinDesk reports that Strategy sold approximately $2.5 million worth of Bitcoin, ending its almost continuous accumulation since the end of 2022. Previously, this company was one of the most representative examples of corporate Bitcoin allocation, inspiring more listed companies to follow its path and use capital markets to purchase crypto assets such as BTC and ETH.
This model worked smoothly during last year's market upswing. At that time, the stock prices of the relevant companies were at a premium to the value of their assets, and financing conditions were favorable. However, as the market weakened after October last year, token prices fell, and the stock prices of some treasury companies fell below their net asset value. As a result, it became more difficult to continue raising funds to buy tokens, and the stock prices of many companies retreated by more than 90% from their highs.
Despite this, Strategy remained a significant buyer in the Bitcoin market in May. The report noted that the company purchased over 25,000 BTC that month, investing over $2 billion. In other words, while the sale was small in scale, it was highly symbolic, signifying the end of its buying spree.
The number of companies still buying has decreased.
Few companies are still actively increasing their holdings. Ethereum treasury company Bitmine bought approximately $53 million worth of ETH last week, accumulating over 338,000 ETH in May, worth about $665 million at current prices. The company currently holds over 5.4 million ETH, making it one of the largest corporate Ethereum holders. However, Tom Lee stated that Bitmine will slow its buying pace as it approaches its goal of holding 5% of the circulating supply.
Another Ethereum-related company, Bit Digital, returned to the market in May, buying approximately $20 million worth of ETH, marking its first increase in holdings since October of last year.
Regarding Bitcoin, Strive disclosed that it purchased approximately 1,944 BTC in multiple transactions in May, with a total cost of approximately $150 million. Japanese listed company Metaplanet also disclosed in early April that it purchased 5,075 BTC.
Furthermore, Hyperliquid Strategies, which focuses on the Hyperliquid ecosystem token HYPE, stated that the company invested $216 million from early December last year to the end of April this year, purchasing 7.3 million HYPE tokens. As the price of HYPE subsequently rose to an all-time high, this investment has more than doubled in return.
Some companies have begun to reduce their holdings or shift their focus.
Compared to the few companies still buying, more businesses have recently chosen to reduce their holdings. Nakamoto Holdings, a Bitcoin treasury led by David Bailey, sold 284 BTC in March, approximately 5% of its holdings. Empery Digital sold 370 BTC in April to repay term loans. Genius Group also stated in April that it had liquidated its remaining 84 BTC to repay $8.5 million in debt.
Some companies have also discontinued their treasury model. Forum Markets, formerly known as ETHZilla, shifted its focus to tokenization earlier this year after selling approximately $114 million worth of ETH.
Judging from the current situation, corporate crypto treasuries have not disappeared as a whole, but buying is becoming more concentrated in the hands of a few companies that still have financing capabilities and are willing to continue expanding their balance sheets.
