New Play in Alt Season of US Stocks: Public Companies Buy Coins to Pump Market Capitalization, Is the "Coin-Stock Correlation" Real Value or Just False Prosperity?

In the current rapidly changing financial market, a new trend is sweeping through the US stock market: listed companies are purchasing Crypto Assets, turning their main business into a complement, and digital assets are transforming into a new market capitalization engine. This phenomenon of "coin-stock linkage" has made "buying coins" a cheap and quick method for market capitalization pump in the stock market. However, the problems are becoming increasingly sharp: will the market really keep buying into this valuation game under the guise of borrowing coins? Is this an innovative move for corporate transformation, or a short-term speculation frenzy?

1. Valuation Logic: How Does Buying Coins Affect Corporate Value?

"Buying coins" resembles an experiment in valuation shifts interwoven with emotions, liquidity, and narratives. In traditional valuation frameworks, a company's market capitalization stems from core variables such as its profitability, asset-liability structure, growth potential, and free cash flow. However, in this wave of "buying coins", companies have leveraged their behavior of holding Crypto Assets as a "financial allocation" to trigger a repricing of the market's valuation.

When companies incorporate Bitcoin or other mainstream Crypto Assets into their balance sheets, the market valuation adds a premium multiple based on the elasticity of Crypto Assets prices and expected tradability. In other words, a company's market capitalization is derived not only from value creation but also from the leveraged amplification of the possibility of "coin price increase." However, this structure almost places the "liquidity narrative" above corporate operations, transforming financial allocation into the main axis of capital operations. This means that a company's stock price performance is no longer solely determined by the operational status of its core business but is closely tied to the volatility of the cryptocurrency market.

2. Short-term boost, long-term still a question mark

It is undeniable that entering the crypto market does indeed have the ability to stimulate stock prices in the short term. Taking the automotive trading service provider Cango as an example, the company announced in November 2023 that it would enter the Bitcoin mining sector, investing $400 million to purchase 50 EH/s of computing power resources, which immediately caused its stock price to soar by 280%. Similarly, many companies with lackluster main business performance, or even deep financial troubles, are also trying to leverage the "buy coin" narrative to seek revaluation in the capital market.

From the market performance perspective, the phenomenon of "buying coins leads to a surge" has occurred multiple times. As long as the concept of "Crypto Assets" is introduced, short-term funds quickly flow in. However, after a short-term spike, many "coin-holding companies" face price corrections. If there are no continuous coin purchasing actions or other positive news to keep stimulating, it will be difficult to maintain the increase.

Therefore, although the "buy coin" strategy can stimulate market enthusiasm in the short-term, whether it can be transformed into the long-term competitiveness and sustained growth of enterprises is still full of uncertainty. The market also finds it difficult to truly recognize those followers who seek attention merely by making one or two coin purchases or vague "holding coin plans." This has led investors to start pondering how long this "coin-stock linkage" model can actually last.

3. Are speculators starting to sell? Core players taking profits

The story of "buying coins to pump valuations" continues to brew, but some core players seem to have quietly taken profits.

According to reports, the proponents of the "infinite growth" theory at Strategy have been reducing their holdings of the stock $MSTR. Data from SecForm4 shows that since June 2023, insiders at Strategy have entered a concentrated selling period. A report by Protos indicates that in just the past 90 days, executives have cumulatively sold stocks worth a total of 40 million USD, with the number of sales being 10 times that of purchases.

The "Sol-based Micro Strategy" Upexi has recently faced pressure, as the company previously raised $100 million to establish a Sol treasury. However, Upexi plummeted by 61.2% during trading yesterday, as investors registered to sell 43.85 million shares, equivalent to its total circulating shares at the beginning of April.

On the other hand, the stablecoin issuer Circle saw its stock price soar to nearly $300 after going public. However, Ark Invest, which had strongly supported it before the IPO, has been continuously reducing its holdings. It is reported that Ark Invest has sold off Circle shares for the fourth consecutive time, cumulatively reducing its holdings by more than 36%.

When "buying coins" becomes a form of packaging, a market capitalization tool, or even a narrative shell to evade fundamental scrutiny, it is destined to not become the "key to success" for all businesses. Today's market is willing to pay for "financial allocation," while tomorrow's market may return to a genuine inquiry into growth and profitability. Buy orders in the secondary market do not necessarily reflect recognition; rather, they are more likely to be chips rotating for short-term speculation.

4. New Developments in Solana Treasury: The Potential of Accelerate

In the context of "coin-stock linkage," new players continue to emerge. On July 24, according to Unchained, Joe McCann, founder and CEO of the crypto hedge fund Asymmetric Financial, will become the CEO of a new Solana treasury company named Accelerate. The company plans to raise up to $1.51 billion, with plans to raise $850 million through PIPE, convertible to $500 million SPAC, and to sell $103.2 million in the form of SPAC warrants. If this financing is successful, Accelerate will immediately start establishing a new Solana treasury, potentially becoming the largest SOL treasury management company in the market. This indicates that despite market doubts about the "coin-stock linkage" model, there is still new capital and projects continuously emerging, attempting to replicate the successful model.

Conclusion:

The frenzy of "coin-stock correlation" is a reflection of the intertwining of the current Crypto Assets market and the traditional stock market. It reveals the significant influence of market sentiment, liquidity, and narratives on valuation. However, when "buying coins" becomes a quick fix for a company's market capitalization, its long-term sustainability remains a question mark. Investors should remain vigilant and carefully discern which innovations truly have long-term value and which are merely bubbles of short-term speculation. After all, the market will ultimately revert to considerations of the company's fundamentals and real value.