In April, a new FAD came on the scene after Michael Saylor, founder of MicroStrategy (MSTR), laid the foundation for a new type of public stock corporation, the so-called “Bitcoin Treasury Company.”
Like other Wall Street fads, early adopters earned disproportionate benefits ahead of their swarm of trending followers. However, the epidemic is already declining as investors are beginning to get bored of overpayments on public balance sheets.
With the acronym in Bitcoin’s BTC symbol, modeled after the micro-strategy itself, these Bitcoin finance companies have pledged to postpone the traditional investment framework for discounted cash flow analysis.
Instead of boring business activities such as building products and services to pay customers, they mainly skip such nasty details and focus on something more exciting.
Bitcoin Treasury Company season begins
Bitcoin Trejury Company Season began on April 23rd In earnest in the launch of Twenty One, a Tether and Bitfinex-led partnership between Jack Mallers and Ex-Howard Lutnick’s Cantor Fitzgerald.
The published Cantor Equity Partners told the world that they would soon be renamed Twenty One itself, and intended to earn 42,000 BTC that day.
Within six days of news of its ambitious plan, Cantor Equity Partners was promoted from $12.52 to $59.75 per share.
Bitcoin finance companies were in a hurry to put together their actions. Next, Vivek Ramaswamy’s asset entities released a May 7 press release that said they would purchase up to $1 billion worth of BTC.
Under that headline, the stock will rise from $1.73 to $8.92 within two business days and up to $13.42 within 11 business days.
Finally, Peak Mania arrived on May 12th with David Bailey Nakamoto. Within a single pre-market sessionthe stock traded 23 times its expected BTC holdings.
Soon, mid- and lower-level stocks began to try and steal sparks from the embers of fireworks over the last three weeks.
The quality quickly deteriorated to the penny stock territory.
Mania ends with penny stock shit
No one has heard of Nilam Resources, Green Minerals, Trident Digital Tech, Classover Holdings and other small businesses unveiling future plans to acquire a large amount of digital assets. Their stocks will deteriorate quickly and quickly.
Announcement of a new Bitcoin finance company today is no longer a particularly good catalyst for major stock pumps.
For example, on June 25th, Sixty Six Capital announced its holdings worth 113 BTC. That stock rose slightly in trading on the first day, but totaled less than millions of dollars.
At the end of yesterday’s transaction, the market capitalization equals the value of the BTC holdings. This was a multiple of 1x, and it became miserable under the 23x multiple that Nakamoto enjoyed on May 12th.
Even the massive GameStop didn’t enjoy the easy benefits when it became a Bitcoin treasury company.
On May 28th, GameStop announced its new holdings of 4,710 BTC. However, rather than loading it into stocks, investors actually sold the stock after the news. The shares opened for $35.78 That day it fell by 13%.
Bitcoin Treasury Corp. is another Canadian fugitive in the Bitcoin Treasury Company game. On June 26th, it announced its first acquisition of BTC. On a disappointing day of just $2 million, the stock opened in the news in a $11 deal, ending the session at a disappointing $9.78.
Sector-wide recession
Even existing Bitcoin finance companies have been trending low over the past few weeks.
At the end of yesterday’s deal, Nakamoto is like that. Below 60% May 22nd, Canter Equity Partner is May 22nd Under 54% That’s the high asset entities of May 1st Below 72% There will also be a height of May 22nd, and a micro strategy. Under 13% High school on May 9th.
Read more: Wall Street Loves to Sell Its Cryptocurrency Stocks
Overall, the appetite of the market appears to be cooled for companies that simply utilize debt and stock issuance to acquire BTC.
With shorter enthusiasts from late April to early May, more reasonable ratings are already beginning to return to the sector.