Public Companies’ Crypto Hoarding Frenzy: From ‘Buying Coins’ to ‘Setting Up the Game’—What Risks to Watch?

Public companies are no longer satisfied with just buying Bitcoin (BTC) or Ethereum (ETH). They’re copying MicroStrategy’s “treasury magic”—using traditional financial tools (like PIPE, SPAC, convertible bonds) to raise cash, hoard crypto, tell stories, and wrap it all in an “on-chain treasury” narrative, turning BTC, ETH, and SOL into “core assets” on their balance sheets. This isn’t just asset allocation—it’s a “financial engineering experiment,” driven by capital, storytelling, and regulatory gaps.

But Wall Street veterans are wary. Short-seller Jim Chanos warns: today’s “Bitcoin treasury craze” is repeating the 2021 SPAC bubble—companies issuing convertible bonds and preferred stock to buy crypto, with no real business to back it up. “Hundreds of millions in daily announcements, just as疯狂 as back then,” he says.

What tools fuel this trend, and how can retail investors avoid traps?

Tool 1: PIPE—Institutions Buy Low, Retail Buys High

PIPE (Private Investment in Public Equity) lets public firms sell discounted stocks/bonds to institutions for quick cash. In crypto hoarding, it’s used to signal “institutional endorsement,” pump stock prices, and rebrand as “crypto reserve companies.”

Examples: SharpLink Gaming raised $425M via PIPE to buy ETH, sending its stock up 10x—then crashed 54.4% in 5 days after filing S-3 (allowing institutional sell-offs). BitMine similarly spiked then dropped 39% in a day post its $2B PIPE announcement.

Risk: Institutions enter at discounts and exit first, leaving retail investors to buy high with information and rights disadvantages.

Tool 2: SPAC—Valuations in Press Releases, Not Financial Reports

SPACs (Special Purpose Acquisition Companies) are shell firms that IPO to raise cash, then merge with private companies to list quickly. Now, they’re “crypto packaging tools”—turning BTC/ETH holdings into exchange-traded stocks, often with no revenue.

Key Players: Twenty One Capital holds 30k+ BTC, merged via SPAC with Tether/SoftBank backing; ProCap focuses on Bitcoin lending; ReserveOne holds BTC/ETH/SOL for institutional staking.

SPAC “sugar”: Fast listing (4–6 months vs. 12–18 for IPOs), eligibility for ETFs/hedge fund trading,看似 “legitimate.” But “poison” abounds:
– No real business: Stock prices depend entirely on “Bitcoin narratives”—mood shifts = crashes.
– Retail dilution: Insiders get early exit rights and pricing discounts, diluting retail investors.
– Compliance risks: Unclear crypto accounting rules make financial reports error-prone; audit risks are high.

Retail Investor Survival Guide

Short-seller Jim Chanos exposes the truth: 2021 SPAC bubble playbooks are back—issuing debt to buy crypto, no real operations, and daily $100M+ funding announcements. Before investing, ask:
– Does the company have actual bussiness beyond “crypto hoarding”?
– Did it really use all funds to buy crypto?
– Are institutions already exiting post-lockup?

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This content is AI-generated and does not constitute investment advice. Please exercise your own rational judgment.

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