A flurry of copycats are trying capture MicroStrategy's magic. Will it work?
What to know:
– Following MicroStrategy's successful bitcoin buying strategy, many companies, some microcaps and unrelated to crypto, started announcing similar steps.
– lThe strategy has led to significant short-term share price rallies for some of these companies, but according to market observers, the long-term success remains uncertain.
– While optimists see this as a step toward more mainstream bitcoin adoption, skeptics view it as a potential short-term fad for some smaller companies.
What does the ragtag group including a fitness equipment maker, biopharmaceutical company and producer of battery materials have in common?
Bitcoin, of course.
As the cryptocurrency skyrockets to unheard-of levels this month, at least 12 publicly traded companies that previously had nothing to do with crypto announced they plan to buy bitcoin (BTC), choosing it as a modern — and, lately, quite profitable — place to park spare cash. It's a path illuminated by Michael Saylor's laser eyessince 2020, when he began converting his sleepy software maker MicroStrategy into a corporate vault for bitcoin.
That's turned MicroStrategy into a massive stock market success — up roughly 30 times in value since Saylor began buying bitcoin for the company, amassing a massive stockpile now worth about $38 billion. Just this month, its shares have nearly doubled in price since Donald Trump was elected U.S. president after pledging to embrace crypto. (Other crypto stocks have jumped, too. Coinbase, the exchange operator, is up nearly 70% since the day before the election.)
Others are trying to duplicate that success. On Friday, a biotech company, Anixa Biosciences (ANIX), said its board of directors approved buying an undisclosed amount of bitcoin to diversify the company's treasury reserves. The stock rallied as much as 19% but settled for a 5% advance by the end of the day. Meanwhile, on Thursday, fitness equipment company Interactive Strength (TRNR) said it plans to buy up to $5 million of bitcoin after its board approved the cryptocurrency as a treasury reserve asset. Following the announcement, its stock soared more than 80% at one point before settling for "only" a full-day gain of 11%.
Earlier last week, biopharma company Hoth Therapeutics (HOTH) announced a $1 million bitcoin buying plan, triggering an up to 25% surge in its stock — though nearly the entire rally fizzled by the end of the day. Similarly, companies including LQR House (LQR), Cosmos Health (COSM), Nano Labs (NA), Gaxos (GXAI), Solidion Technology (STI) and Genius Group (GNS) saw momentary spikes in their stock prices after revealing bitcoin treasury plans in November. Only one company fell after its announcement: Acurx Pharma (ACXP).
