Companies holding cryptocurrency treasuries are beginning to experience share price increases driven by stock buyback initiatives, indicating to analysts that these firms are striving for greater credibility.
Media company Thumzup, associated with Trump Jr., which possesses Bitcoin (BTC) and Dogecoin (DOGE), announced on Wednesday that it is raising its share buyback from $1 million to $10 million, boosting its stock (TZUP) by 7% during the day and an additional 0.82% after hours to a price of $4.91.
Simultaneously, the Solana treasury company DeFi Development Corp (DFDV) increased its own share repurchase from $1 million to a significant $100 million, leading to a stock gain exceeding 5%, eventually settling with over a 2% increase and another 1% after hours, finishing at $15.50.
The increases follow predictions from Coinbase’s research head, David Duong, and researcher Colin Basco, stating in a report dated Sept. 10 that public companies buying cryptocurrency are entering a more competitive “player vs player” phase to attract investor funds.
The treasury competition is now about credibility
Ryan McMillin, chief investment officer at the Australian crypto investment management firm Merkle Tree Capital, indicated to Cointelegraph that the recent stock buybacks signify that the crypto treasury competition is evolving into a “credibility race.”
“Simply stating ‘we hold Bitcoin’ is no longer adequate. Investors demand proficient capital allocation—buybacks, dividends, and transparent treasury strategies,” he noted.
“The integration of corporate finance techniques with the digital asset narrative is impactful. It indicates that these companies wish to be evaluated not just on their Bitcoin holdings but also on returns to shareholders.”
Buybacks signal confidence
However, not all crypto treasury companies pledging buybacks have seen favorable results. The TON Strategy Company, formerly known as Verb Technology Company, announced a similar initiative on Sept. 12, yet its stock (TONX) declined by 7.5%.
McMillin remarked that share buybacks are a “classic signal of confidence” indicating that a company believes its stock is undervalued, which is significant for publicly listed crypto treasury firms as “their valuations often fluctuate in relation to their Bitcoin holdings (mNAV).”
“A buyback can narrow that valuation gap by decreasing the available shares and demonstrating discipline—elements that investors appreciate. Prices may also change as traders anticipate strong demand. Increasing Bitcoin purchases heightens exposure to market volatility,” he explained.
“In contrast, a buyback directly enhances shareholder value while maintaining the integrity of the crypto treasury narrative. It also caters to a wider range of investors—some are drawn to the Bitcoin concept, while others prefer financial discipline. A timely buyback effectively balances both aspects.”
The crypto treasury competition contrasts the dollar with Bitcoin
Kadan Stadelmann, chief technology officer of the blockchain-based Komodo Platform, conveyed to Cointelegraph that when a firm utilizes liquid assets for share buybacks, the quantity of shares available to the public diminishes, creating a scarcity that can increase prices.
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“Crypto treasury firms are vying to build the most appealing treasury framework. Yet, we are witnessing hyperbitcoinization, reflecting a trend of de-dollarization—Bitcoin versus the dollar,” he expressed.
Crypto asset treasuries will endure
Bitbo is monitoring firms that have integrated Bitcoin within their balance sheets, currently holding over 1.4 million coins, accounting for approximately 6.6% of the total supply.
Michael Saylor’s company, Strategy, remains the leader with 638,985 Bitcoin and continues to make regular acquisitions. Some analysts suggest that the market for companies purchasing cryptocurrency may become oversaturated, and not all will thrive in the long run.
Stadelmann does not anticipate a slowdown in the trend of maintaining crypto asset treasuries, forecasting that “an increasing number of companies will allocate portions of their treasuries to Bitcoin and other cryptocurrencies, including Fortune 500 firms.”
“A major concern for investors is identifying which companies are most likely to retain their Bitcoin holdings regardless of market fluctuations instead of selling during downturns or panic situations.”
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