Public Shell Companies Explore Altcoin Purchases Amid Skepticism
Several public companies are reportedly planning to accumulate altcoins to influence their share prices, following the model established by Michael Saylor's MicroStrategy (MSTR), which has amassed 2.9% of all existing bitcoin (BTC). MSTR's share price has increased over 3,000% since adopting its bitcoin treasury strategy in 2020.
Key points include:
- Companies have begun implementing similar strategies for ether (ETH) and other altcoins.
- Avalanche is considering selling AVAX tokens through a publicly-listed shell company to attract investors.
- RSV Capital aims to raise $200 million to purchase TON tokens using a shell company.
- Charlie Lee invested $100 million into MEI Pharma (MEIP) for it to acquire litecoin (LTC), boosting MEIP shares by 17% initially.
Experts express skepticism about the long-term viability of this approach:
- Eric Benoist from Natixis CIB called it "hugely speculative," suggesting companies will ultimately be valued based on their crypto holdings.
- Geoff Kendrick from Standard Chartered considers smaller altcoin treasury moves a "flash in the pan," warning of potential pain for equity or bondholders if token prices decline.