Crypto Treasury Craze Cracks as Firms Start Borrowing to Buy Back Share

The crypto treasury trend that swept through small-cap firms in 2024 is beginning to crack.

Companies that only recently pivoted to loading their balance sheets with cryptocurrencies are now launching share buybacks, often funded by debt, in a bid to prop up falling stock prices, according to a report by the Financial Times.

At least seven firms, including an online gaming company, a golf cart maker, and several biotech and digital asset outfits, are now buying back their own shares.

When Market Caps Sink Below Treasury: Crypto Firms Face Investor Doubt

In some cases, market values have dropped below the worth of the crypto assets they hold, signaling investor skepticism about the long-term viability of the crypto treasury playbook.

One of the most notable developments came when Vivek Ramaswamy’s Strive Asset Management acquired Semler Scientific, a bitcoin-heavy firm that had transitioned from healthcare tech to crypto holdings.

The acquisition underscores how these companies, essentially trading below the value of their token treasuries, are becoming ripe for takeovers.

ETHZilla, formerly known as 180 Life Sciences, is one of the more dramatic examples. After rebranding and buying up ether tokens, the company’s stock dropped 76% from its August peak.

It recently secured $80 million in debt from Cumberland DRW to fund a $250 million share buyback. CEO McAndrew Rudisill said the move was an “accretive use of capital,” but analysts are raising concerns.

“This looks like the death rattle,” said Adam Morgan McCarthy, senior analyst at Kaiko. “They’re borrowing money to buy time, not tokens.”

WATCH: Adam Livingston @AdamBLiv says, #Bitcoin grows over 30% yearly, far above single-digit global capital costs. So, when a treasury company issues new securities, its share value rises, unlike traditional issuers that dilute. In BTC terms, this polarizes upward. pic.twitter.com/gdtGE5iNro

— BitcoinTreasuries.NET (@BTCtreasuries) September 23, 2025

For many of these companies, the strategy is no longer about buying crypto: it’s about salvaging valuations.

Critics argue that using debt to repurchase shares contradicts the very foundation of the crypto treasury model, which hinges on the appreciation of digital assets to lift stock value.

Electric vehicle firm Empery Digital (formerly Volcon) also saw its stock skyrocket and then collapse after shifting to bitcoin holdings.

It has since expanded its debt facility to $85 million for share buybacks, despite holding $476 million in BTC, more than its $378 million market cap.

SharpLink Gaming, Ton Strategy, and CEA Industries are among others executing similar buyback plans after seeing their token-heavy strategies backfire in the market.

In Japan, Metaplanet’s CEO hinted at a similar move if its stock dips below its Bitcoin holdings.

One in Four Public Bitcoin Treasuries Now Trade Below NAV

A recent report from K33 Research reveals that 25% of public companies holding Bitcoin now trade at market values below the worth of their BTC holdings, highlighting a sharp drop in investor confidence.

The growing discount, known as the NAV gap, is limiting firms’ ability to raise capital, particularly hurting smaller players like NAKA, which has seen a 96% collapse in its market value.

While larger firms like MicroStrategy still trade at a premium, the average NAV multiple across treasury firms has fallen from 3.76 in April to 2.8.

BTC accumulation by public firms is also slowing, with just 1,428 BTC added per day in September—the weakest pace in months.

K33’s Vetle Lunde warned that issuing shares below NAV leads to dilution, making capital raises less effective.

Several smaller firms, including Semler Scientific and Twenty One, are now trading below their BTC net asset value, suggesting the crypto treasury boom is cooling off rapidly.