Skeptical view on increase in altcoin purchases by listed paper companies: Financial Times | CoinDesk JAPAN

• Many listed companies may be trying to buy up alts in order to aim for an increase in their stock prices.
• Many companies are mimicking Bitcoin's treasury strategy, and in recent months, several companies have adopted similar strategies for Ethereum.
• However, there are skeptical views about the possibility of this model being applied to other altcoins.

These companies are attempting to mimic the model built by Michael Saylor's strategy. The strategy currently holds 2.9% of all Bitcoin (BTC) that will exist in the future. Since the company launched its Bitcoin treasury strategy in 2020, its stock price has risen by over 3000%.

The treasury strategy of Bitcoin has been mimicked by many companies, and in recent months, several companies have emerged that are implementing similar strategies with Ethereum (ETH).

However, the Financial Times reported on the 25th that some commentators are skeptical about the potential applicability of this model to other altcoins (a general term for cryptocurrencies other than Bitcoin).

The blockchain platform Avalanche is considering selling a portion of its native token Avalanche (AVAX) to a listing shell company. The Financial Times reported this based on information from insiders. The shell company intends to use it to generate yields and acquire an investor base.

The Canadian investment group RSV Capital is reportedly aiming to raise $200 million (approximately 29 billion yen, based on an exchange rate of 145 yen to the dollar) using a shell company set up for the purchase of Toncoin (TON), according to the Financial Times.

This method seems to have brought short-term profits in cases that were actually tested. Charlie Lee, co-founder of Litecoin, announced on July 18 that MEI Pharma made a $100 million investment (approximately 14.5 billion yen) to purchase Litecoin (LTC). The stock price of MEI Pharma rose 17% after the announcement, but then fell, and at the time of writing this article, it is at a level that has increased by about 4.9% over the past week.

However, Eric Benoit, a technology and data research specialist at Natixis CIB, stated that such business plans do not bring long-term profits and described them as "extremely speculative."

Mr. Benoit stated, "In that case, companies will not be saved for a long time," and added, "Ultimately, the value of the crypto assets (virtual currencies) held on the balance sheet will become the value of that company. That's all."

Geoff Kendrick, the Global Head of Digital Assets at Standard Chartered, stated that the trend towards treasuries of smaller alts is a "temporary fad."

Mr. Kendrick further pointed out that if the token price crashes, either the company's shareholders or bondholders will suffer.

| Translation/Editing: Rin Hayashi | Image: Shutterstock ｜Original: Public Shell Firms Ramping Up Altcoin Buys Draws Skepticism: FT