Altcoin treasuries are growing. | Creedit: Michael M. Santiago/Getty Images.
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Key Takeaways
Public companies are adopting ETH, SOL, TRX, BNB, HYPE, and FET as treasury assets.
Altcoin treasuries offer additional revenue streams via staking options.
A publicly traded company’s stock climbs 150% on average within a day of announcing altcoin allocations.
Bitcoin’s (BTC) ongoing rise to the top has seen it adopted by some of the wealthiest entities on Earth, and publicly traded companies are increasingly adopting BTC as a strategic reserve asset.
But, it appears that altcoin treasuries are on the rise as firms look to follow in the footsteps of Michael Saylor’s Bitcoin buying behemoth, Strategy (formerly MicroStrategy).
As per the latest report from Web3 giant Animoca Brands, it appears that public companies are not just looking to Bitcoin as a strategic reserve asset, but also altcoins.
Following the playbook of Strategy, public firms are increasingly using convertible debt and equity issuances to accumulate crypto assets, which is serving well to increase their respective stock values.
Strategy has been doing this for years now and has amassed an absurd 601,550 BTC worth over $71 billion in the process.
As the “Altcoin Strategic Reserves” report highlights, a firm’s stock can jump by 150% within 24 hours of announcing a pivot towards crypto.
Metaplanet, a firm once in the hotel business, pivoted to Bitcoin last April, following in Strategy’s footsteps. In that time, it acquired 16,352 BTC worth roughly $1.95 billion. Its stock price has risen 996% in the past year.
Animoca notes that this is not just a trend; it’s been enabled by recent changes to FASB rules in the U.S., which now allow for fair value accounting on crypto assets, making it easier for firms to hold crypto assets on their balance sheets.
Infinite Money Glitch
As Animoca highlights, Michael Saylor’s firm, Strategy (formerly MicroStrategy), kicked off this trend with a system now referred to as the “Infinite Money Glitch”.
The “Infinite Money Glitch”. | Source: Animoca Brands
In the context of altcoins, it’s a circular flywheel of altcoin purchases that raise a company’s share price, followed by convertible debt, issuing debt, and selling securities, which leads to the next altcoin purchase.
Another key element is the potential staking revenue that altcoins offer. Unlike Bitcoin, many altcoins operate on Proof-of-Stake (PoS) consensus mechanisms, which can reward users with regular payouts.
As Animoca explains, this yield offers a direct, ongoing stream of revenue from the altcoin holdings, which can enhance a company’s cash flow and profitability.
There are some risks, as altcoins are subject to high volatility, which may put strain on a firm’s ability to repay the principal on its convertible bonds.
This bullish sentiment, alongside the fact that retail and institutional investors are now rallying behind Ethereum and alts, is leading many to believe altcoin season is finally here.
Eddie is a gaming and crypto writer at CCN. Covering the often weird and wonderful world of Web3 with an adoring, but skeptical eye.
Prior to CCN, Eddie has spent the past seven years working his way through the crypto, finance, and technology industry. He began with PR and journalism with Bitcoin PR Buzz and BitcoinNews.com, eventually working his way to become a copywriter with a dozen firms, including the likes of Polkadot before returning to journalism in 2023.
Having studied Radio production and journalism at University in the UK, Eddie spent a few years making podcasts and presenting on a local London radio station as he built up his writing chops.
A lifelong skateboarder, Eddie can often be found at the skatepark or touring the streets looking for something new to try. That, or kicking back playing JRPGs on his original PSP.
