Adam Back: Bitcoin Treasury Boom Offers Better Returns Than Altcoin Seasons

Investing in shares of publicly traded companies that are accumulating reserves in Bitcoin presents a lucrative alternative for traders during the altcoin season. This perspective was shared by Adam Back, co-founder and CEO of Blockstream.

“They might offset their losses by shifting to Bitcoin through companies with treasuries,” the entrepreneur noted.

Back emphasized that corporations accumulating digital gold are “constantly purchasing cryptocurrency,” which bolsters its per-share value, making these stocks appealing for investment.

These firms utilize various methods to secure additional funding, such as private placements, convertible bonds, and ATM programs.

According to Back, while these funds do not directly contribute to Bitcoin, they enable companies to increase their purchases of the digital asset, positively impacting its market value.

In April, he mentioned that the corporate accumulation of Bitcoin reserves would lead to a sustained “hyper-bitcoinization,” potentially increasing its market capitalization to between $100 trillion and $200 trillion.

As reported by BitcoinTreasury, more than 240 publicly traded companies currently hold Bitcoin on their balance sheets. Over the past 30 days, this number has nearly doubled, with the total reserves increasing by 13.4% to 834,779 BTC.

Leading the segment is Michael Saylor’s firm, Strategy, which holds 592,345 BTC. This figure was bolstered by a recent acquisition of 245 BTC at approximately $105,856 per coin, totaling around $26 million, as the company announced on June 23.

Strategy was the first to scale corporate investments in Bitcoin, actively attracting equity and debt capital. In October 2024, the company unveiled a three-year plan for acquiring Bitcoin worth $42 billion. Some analysts have identified signs of a potential financial pyramid structure in the company’s ongoing and increasing securities offerings, which could lead to a collapse at some point.

Analysts from Coinbase Institutional believe that imitators of Saylor’s company, such as Metaplanet, Semler Scientific, and Twenty One Capital, pose even greater systemic risks for Bitcoin and the broader market.

Experts argue that during periods of market stress, these companies may need to sell their Bitcoin reserves to meet obligations, causing downward pressure on the price of the digital asset and potentially triggering a cascading effect. In contrast, Strategy’s model is more resilient due to its relatively low average acquisition price of around $70,681, whereas its “clones” have a significantly higher entry threshold.

Recall that Bernstein has forecasted a rise in corporate Bitcoin reserves to $330 billion by 2029.

According to estimates by Architect Partners, by that time, approximately a quarter of the S&P 500 companies will hold Bitcoin as a long-term asset.